By Kin Ohmura
Osaka Chemical Service

The year 2023 was a year of industry reorganization for Japanese nonwovens manufacturers as companies have sought to defend themselves against lower demands both domestically and in Asia.

In April 2023, Toyobo and Mitsubishi Corporation formed a joint venture, Toyobo MC, and Toyobo’s nonwovens business was transferred to the joint venture. By combining Toyobo’s management expertise and functions, the new company offers high value-added solutions to its customers while leveraging Mitsui’s network to facilitate the global expansion of Toyobo’s materials, according to the companies.

In October 2023, Mitsui Chemicals and Asahi Kasei formed a joint venture, Mitsui Chemicals Asahi Life Materials, and their spunbonded nonwovens businesses were integrated into the joint venture. This plan was carried out through a corporation-type demerger and includes all of Mitsui Chemicals’ nonwovens businesses with the exception of its SWP fibrillated polyolefin fiber being integrated with Asahi Kasei’s spunbond and cartridge filter business. Mitsui owns slightly more than 60% of the company while Asahi Kasei will hold the remaining shares. Sales are estimated about $370 million annually.

The Japanese sites for the company include Mitsui’s Sunrex subsidiary in Mie, Japan, as well as its Nogoya Works plant in Aichi. Meanwhile, Asahi Kasei’s plant in Moriyama provides outsourced production. Overseas sites including both companies’ Thailand operations, which continue to carry out production and sales as subsidiaries of the integrated company.

In December 2023, Nikke Corporation merged its subsidiaries Ambic and Fuji Corporation to form F&A Nonwovens, and the nonwoven fabrics businesses of both companies were integrated into F&A Nonwovens. Both companies are integrated manufacturers of nonwoven fabrics and felts supplying products to a wide range of fields including environmental, automotive and office automation. Amidst recent drastic changes in the business environment, integrating the two businesses will increase efficiency and concentrate management resources to improve competitiveness domestically and internationally.

Currently, the company produces about 7000 tons of nonwovens per year from recycled fiber but plans are underway to add 3600 tons per year by March 2025. This will primarily target acoustics applications for automotives.

The establishment of these joint ventures and the management integration of the subsidiaries were all aimed at restructuring the nonwovens business due to its poor performance. In May 2023, Japan Vilene announced that it would withdraw from domestic sales of nonwoven fabrics for apparel by June 2024.

Japan’s demand for nonwovens peaked in 2018 at 530,886 tons, and in 2019, the global economy was in recession due to the U.S.-China trade friction, causing domestic demand for nonwovens to decline to 512,499 tons. From 2020, the spread of the new corona infection will further reduce demand for nonwoven fabrics, and in 2022 demand for nonwovens will decline further and shrink to 475,652 tons. Meanwhile, the shift to a weaker yen caused raw material and fuel costs to soar, and the nonwoven fabrics business of each company saw its profitability deteriorate. This prompted the companies to move toward structural reform in 2023, including the establishment of joint ventures, business integration, and withdrawal from domestic sales.

The largest scale reorganization of the nonwoven fabrics business is the integration of the spunbonded nonwoven fabrics businesses of Mitsui Chemicals and Asahi, which amounts to 132,000 tons/year. Toray’s production capacity of 231,000 tons/year is larger, but Toray’s performance in the nonwovens business is also deteriorating. In the Chinese market, its main market, price competition for PP spunbonded nonwovens is intensifying, and for this reason Toray is aiming to shift to higher value- added products that will not fall prey to price competition.

In the domestic market in 2023, demand for automotive nonwovens is expected to increase significantly as automobile production increases, and demand for automotive applications is expected to continue to increase in 2024. However, demand for non-automotive applications has been declining and is not expected to increase much in 2024 either. In particular, diapers declined significantly, and nonwovens for diapers will continue to face an uphill battle in 2024. Since an overall turnaround in market conditions is not expected, the effect of reorganization by nonwoven manufacturers will not be seen for two to three years, and the market will remain in a difficult situation for the time being.