Prague, Czech Republic
www.pfnonwovens.com
2024 Nonwovens Sales: $600 million

Key Personnel
Marek Krejci, CEO; Shane Vincent, chief commercial officer; Rahul Nayak, vice president, global business development; Karthik Ramaratnam, vice president, global technology and innovation; Bart Wiertz, vice president, global sourcing

Plants
Czech Republic (Znojmo & Bucovice), Egypt (6th of October City), South Africa (Cape Town), United States (Hazleton, PA)

Processes
Spunbond, Meltblown, Bi-Component, air through bonding, proprietary in-line texturing technology

Major Markets
Personal care (baby diapers, adult incontinence, fem care, wipes), healthcare, industrial and agriculture

Total nonwovens sales are estimated at $600 million for PFNonwovens, a maker of spunmelt nonwovens with plants in Pennsylvania, the Czech Republic, Egypt and South Africa. The company currently operates a Reifenhauser Reicofil 5 line on each continent where it has a manufacturing operation, allowing it to offer high-performance and competitive materials to the personal care, healthcare and industrial markets.

Throughout the 2010s, PFNonwovens made significant investments, but the company has not added a new production line since 2022 when its finished work on two Reicofil 5 spunmelt lines—one in Hazleton, PA, and another in Cape Town, South Africa. PFNonwovens has also made recent investments in a semi-commercial Reicofil 5 spunbond line in Znojmo, Czech Republic, which includes pilot capabilities for developing lifecycle assessments in-house.

Amongst other things, the partial pilot line has allowed PFNonwovens to commercialize nonwovens made from PLA. Reducing usage – innovative solutions has allowed PFNonwovens to do more with less leading to the ability to downgauge materials while maintaining physical properties or even improving in some cases, according to exectuives. These solutions improve the sustainability profile and reduce cost to our customers.

Looking ahead, PFNonwovens continues to evaluate opportunities for further investment but has not yet finalized any plans. The existing oversupply in the market combined with the fact that more capacity is being added creates a significant challenge to make a compelling business case for further investment at the current timing.

In the meantime, the company will continue to optimize its existing lines while focusing on improving its product mix, all with an eye toward its sustainability goals. Other areas of focus include recycling, where continuous work to identify and create opportunities during production is underway. Using post-consumer recycled materials remains a challenge but also an ambition for PFN.

Plants: Czech Republic (Znojmo & Bucovice), Egypt (6th of October City), South Africa (Cape Town), United States (Hazleton, PA)
Processes: Spunbond, Meltblown, Bi-Component, air through bonding, proprietary in-line texturing technology
Major Markets: Personal care (baby diapers, adult incontinence, femcare, wipes), healthcare, industrial and agriculture

Total nonwovens sales were reported at $600 million for PFNonwovens, a maker of spunmelt nonwovens with plants in Pennsylvania, the Czech Republic, Egypt and South Africa, a decrease compared to 2022. The company currently operates a Reifenhauser Reicofil 5 line on each continent where it has a manufacturing operation, allowing it to offer high-performance and competitive materials to the personal care, healthcare and industrial markets.

Executives report that European demand for nonwovens had been decreasing since peak levels in 2020-2021 but is starting to come back to pre-pandemic levels. However, oversupply continues to exist in regions where significant capacity was added during Covid. This situation has been exacerbated by pricing challenges and lower consumer spending power.

“We are seeing two negative impacts coming together for nonwovens producers – customers demanding lower pricing, due to their consumers’ reduced ability to purchase, and oversupply in the market making those desired price levels more achievable,” says CEO Marek Krejci.

Additionally, pressure from Asian imports, caused by a severe supply/demand imbalance in the region, has also intensified pressure within the European nonwovens industry. At the same time, in North America, overcapacity persists, but demand is growing at a faster pace.

“While the markets are different, the overarching themes remain the same – oversupply, pressure from customers to deliver cost savings are at an all-time high—all resulting in unprecedented pressure on margins,” Krejci adds. “The prevailing theme over the last few years has become – expect the unexpected.”

In response to these challenges, PFNonwovens continues to focus on factors like energy usage and efficiency to reduce costs. The company’s recently implemented energy strategy focuses on supply insurance, cost reductions and reduced consumption. “In the past, energy purchasing was more transactional while today it has become a strategic focus area for PFN,” Krejci says.

Throughout the 2010s, PFNonwovens made significant investments, but the company has not added a new production line since 2022 when its finished work on two Reicofil 5 spunmelt lines—one in Hazleton, PA, and another in Cape Town, South Africa. PFNonwovens has also made recent investments in a semi-commercial Reicofil 5 spunbond line in Znojmo, Czech Republic, which includes pilot capabilities for developing lifecycle assessments in-house.

“We are able to start with ideation and complete with commercialization all at our site in Znojmo,” says CCO Shane Vincent. “Given the size of the line, we find it to be the right balance between a typical pilot line and a full-scale Reicofil line. In terms of product mix we are focused on soft, loft and sustainable materials.”

Amongst other things, the partial pilot line has allowed PFNonwovens to commercialize nonwovens made from PLA. “Reducing usage – innovative solutions that allow us to do more with less leading to the ability to downgauge materials while maintaining physical properties or even improving in some cases,” Vincent adds. “These solutions improve the sustainability profile and reduce cost to our customers.”

Looking ahead, PFNonwovens continues to evaluate opportunities for further investment but has not yet finalized any plans. The existing oversupply in the market combined with the fact that more capacity is being added creates a significant challenge to make a compelling business case for further investment at the current timing.

In the meantime, the company will continue to optimize its existing lines while focusing on improving its product mix, all with an eye toward its sustainability goals. Other areas of focus include recycling, where continuous work to identify and create opportunities during production is underway. Using post-consumer recycled materials remains a challenge but also an ambition for PFN.

“From a lower footprint materials standpoint, our ambition is to offer a full menu to customers,” Vincent says. “In our experience so far, there is no single solution that works for all customers. Bio-based materials are part of the menu – including 100% bio-sourced as well as mass-balanced solutions.”

Plants: Czech Republic (Znojmo & Bucovice), Egypt (6th of October City), South Africa (Cape Town), United States (Hazleton, PA)
Processes: Spunbond, Meltblown, Bi-Component, airthrough bonding, proprietary in-line texturing technology
Major Markets: Personal care (baby diapers, adult incontinence, femcare, wipes), healthcare, industrial and agriculture

Five years after the merger of two of the world’s largest nonwovens producers Pegas and First Quality Nonwovens, PFNonwovens, a leading producer of spunbond nonwovens, continues to focus on global investments, currently operating 20 production lines across the globe.

In recent years, PFNonwovens increased its production capacity and capabilities at each of its manufacturing sites. This includes the addition of a Reifenhauser Reicofil 5 spunmelt line on each continent where PFNonwovens operates. These investments are allowing PFNonwovens to offer high performance and competitive materials to the personal care, healthcare and industrial markets.

These investments have also strengthened PFNonwovens’ ability to plan and supply seamlessly from any of the sites with a global integrated network that dramatically increases supply resiliency and provides better service to customers.

The latest technology in the production process such as the latest Reicofil lines, air through bonding technology or proprietary waterjet treatments, allow PFNonwovens to significantly improve product performance, mainly softness, texturing, and liquid management in premium products. In addition to increasing performance, the lines have helped PFNonwovens create more sustainable materials. Sustainability continues to be a top priority, which is evident through various certifications including the EcoVadis Gold certification for the Znojmo, Czech Republic site and EcoVadis Silver at PFNonwovens sites in South Africa, Egypt and the U.S. The latest lines feature bicomponent capabilities to produce bio-sourced and other specialty products and allow the company to expand its production of medical fabrics.

“Our technologies are helping us push the limits of what we can do especially in terms of wellness, comfort and sustainability,” says CEO Cedric Ballay. “We think we have come up with the softest nonwoven materials available. We aspire to be the most innovative actor in the industry.”

The sustainable solutions are focused mainly around 100% recycled raw material, negative carbon footprint, degradability or bio-based nonwovens designed to be the softest in the market.

Plants: Znojmo and Bucovice, Czech Republic; 6th of October City, Egypt; Cape Town, South Africa; Hazleton, PA, USA
Processes: Spunbond, meltblown, SMS, bicomponent
Major Markets: Hygiene, healthcare, wipes, agriculture, furniture, building, protective apparel, industrial

Investment continues at PFNonwovens. The Czech Republic’s largest nonwovens producer has completed work on its latest line in Hazleton, PA, and is completing construction of a second new line in Cape Town, South Africa. Both new lines are Reicofil 5 spunbond lines, which offer a state-of-the-art specialized and proprietary fabric enhancement unit to create premium soft fabrics for the hygiene market. The lines also have bicomponent capabilities to produce bio-sourced and other specialty products, increasing the company’s capacity to produce medical fabrics to address medical crises.

In addition to the two new lines, PFNonwovens also has a semi-commercial Reicofil 5 in operation in Znjomo, Czech Republic, meaning it has the technology on three continents, which allows it to be on the leading edge of technology with state-of-the-art assets.

“We like the capabilities of the Reicofil 5 lines,” says CEO Cedric Ballay. “It definitely gives us a lot of options.”

Looking back on 2021, Ballay described the year as a strong one in terms of plan execution. “We had a lot of things we wanted to do and the big thing was continuing to invest organically in the company,” he says.

However, things have begun shifting in 2022, especially supply chain disruption, inflation, electricity prices in Europe and labor costs in the U.S. “It’s not exactly clear yet how all of these factors will impact our results,” Ballay adds.

These issues have impacted the timeline for future investments. In December 2020, the company said it would add a second new line in Hazleton, creating a North American center of excellence with start-up scheduled for some time in 2022. However, the company has not yet released any additional details on the line or confirmed a specific dates for its construction and startup.

“Things have gotten more expensive and the lead times have gotten longer so it is making investment more complicated,” Ballay says. “We are continuing to look at the market and talking with our customers about the future needs of the market.”

In the Czech Republic, PFN has invested in new technology to make propriety premium apertured and three dimensional nonwovens to expand and diversify its product portfolio for the medical and hygiene markets. This new technology came onstream late last year to add more value to its premium and ultra-premium softness solutions. The technology can create patterned topsheets with higher absorption and beautifully textured backsheets with improved breathability.

“This technology is allowing us to make some progress with offering new product differentiation to our customers as well as product development, sustainability, more value-added products and even more recycling,” Ballay says.

Plants: Znojmo and Bucovice, Czech Republic; 6th of October City, Egypt; Capetown, South Africa; Hazleton, PA, USA
Processes: Spunbond, meltblown, SMS, bicomponent
Major Markets: Hygiene, healthcare, wipes, agriculture, furniture, building, protective apparel, industrial

Demand surges in many of its key markets as well as the impact of two new production lines helped PFNonwovens’ sales reach $500 million in 2020. Growth is expected to continue thanks to an aggressive investment strategy aimed at delivering fabrics with superior performance, providing increased wellness and protection, in a more sustainable way.

The company is in the midst of a dual phase investment at its North American Center of Excellence in Hazleton, PA. The first phase of this investment centers around a Reicofil 5 spunmelt line—the first of its kind in North America—which will be up and running in the second half of this year responding to increased demand for the company’s latest innovations.

“Hazelton is at the forefront of delivering superior products for the hygiene and medical markets. This state-of-the-art investment will help us to achieve a level of softness and sustainability we have not seen before” says CEO Cedric Ballay. “The line will feature two proprietary technologies—in order to produce revolutionary, cottony-soft, ultra high loft and textured products for the North American market,” says Shane Vincent, chief commercial officer.

In December 2020, PFN announced the second phase of investment in Hazleton, saying at the time that a second line would be added at the site, however no additional details have been released.

Meanwhile, in June, PFN announced it would invest $40 million in an expansion of its operations in Cape Town, South Africa, which was first established in 2017.

This investment will further develop its manufacturing facility and lead to the creation of up to 40 new jobs. The addition of a new Reicofil 5 line at the site will give the company the ability to meet the growing local market needs for high value and specialty products with increasing levels of softness, comfort and sustainability.

“We are the first company to invest in the latest Reicofil R5 machinery in South Africa, and this exciting expansion will not only localize manufacturing, it will also allow for more sustainable and flexible production which is required to meet the growing needs of both our global and local clients,” says Wilhelm Cronje, director for PFN South Africa. “The Western Cape is a natural choice to base the company’s African expansion, with a world class infrastructure and access to the rest of the continent.”

Mariann Forsström, PFN’s newly appointed EMEA commercial director, commented that “this investment aligns with our global strategy to grow our hygiene and medical markets on the African continent as well as providing a base for exports to neighboring regions.”

The new line should be complete in late 2022.

Additionally, the company continues to ramp up recently completed investments in the Czech Republic. At its site in Znojmo, PFN has completed a semi-commercial Reicofil 5 line, which is used for commercial projects but also for research and development.

“Investing in Reicofil 5 technology throughout our sites globally makes sense because diaper premiumization and demand for more sustainable products requires this technology,” Ballay says.

“Innovation is something we spend a lot of time on and this line is a fantastic tool for that,” Tonny De Beer, chief technology officer, adds. “It has the potential to make products that are unrivalled today in the market and we have not yet reached its limits. There is much more potential in improving softness, loft and the ability to run sustainable materials.”

Also in Znojmo, PFNonwovens has recently added capabilities to offer apertured and 3D embossed fabrics for hygiene and medical applications. These products offer more tailored solutions to specific customers in a more flexible way.

In divestment news, in May 2020 PFNonwovens sold its Wuxi, China, operations, which were once a part of First Quality Nonwovens, to Jofo Nonwovens. At the time of the divestment, PFN executives said the transaction would allow it to focus on supporting its global customers in their key markets while building on its core strengths, namely high value added and innovative products. This includes recent investments in North America, Europe and Africa.

Plants: Znojmo and Bucovice, Czech Republic; 6th of October City, Egypt; Capetown, South Africa; Hazleton, PA
Processes: Spunbond, meltblown, SMS, bicomponent
Major Markets: Hygiene, agriculture, healthcare, ecology, furniture, building, protective apparel, industrial

Two years after combining the former nonwovens businesses of Pegas Nonwovens and First Quality Nonwovens, PFNonwovens continues to invest to grow its business for the future. In 2019, the Czech-based company reported sales increased to $550 million thanks to the continued affects of the integration of First Quality Nonwovens as well as the start of commercial production in South Africa and the completion of a semi-commercial line in Znojmo, Czech Republic.

According to Cedric Ballay, CEO, the South African site is running at full speed. “We are happy with the results and its contribution to the whole group, and we see a potential to add additional lines in the future as we develop the market there,” he says.

Meanwhile, the semi commercial line in Znojmo has not yet been completed. The company is still finishing and testing the installation of the special part of the line which is believed to provide a competitive edge. “It will enable us to supply products which cannot be produced currently with conventional methods,” Ballay explains. “As such, it is however now premature to evaluate it.”

The semi-commercial line, which is based on the Reicofil 5 platform, uses proven bicomponent technologies, offers a wide range of fiber types and profiles and enables the use of a variety of raw materials. Another significant element of this technology is the nonwoven textile bonding system, which is an alternative to the presently used conventional systems. The line is considered a fundamental building block to PFN’s newly built global innovation center expected to help the company achieve significant success in research, testing and commercialization of new products.

Looking ahead, sales will continue to be boosted from recently announced investments including a new spunmelt line in Hazleton, PA. The spunmelt line, which features bicomponent technology, will have proprietary capabilities to support specialty products, allowing PFNonwovens to address a lack of bicomponent capacity in the U.S. and meet demand for more sophisticated products.

PFNonwovens announced the new investment in April, saying it would be a 3.2-meter Reicofil 5 line featuring a state-of-the-art specialized and proprietary fabric enhancement unit that will create premium, garment-like fabrics for the North American hygiene market. It will also have a bicomponent capability to produce bio-sourced and other specialty products, notably for the medical markets.

Additionally, PFN is still considering installing a new meltblown line in the Czech Republic, an intention first announced during the initial stage of the coronavirus pandemic in April. “We are currently discussing the options,“ Ballay says.

Amidst this investment, PFN is also streamlining its assets. In May, the company announced it would sell its plant in Wuxi, China, which was once owned by First Quality, to Jofo Nonwovens, a Chinese-based nonwovens producer. “The decision to sell plant in Wuxi was in line with our strategic plan for expansion and investments and was perceived as a good opportunity to withdraw from the Chinese market which prior to the pandemic was characterized by overcapacity and intensive pricing pressures from customers.“

PFNonwovens acquired the Wuxi site when its parent company R2G acquired First Quality Enterprises in May 2018. First Quality had built the Wuxi site in 2007. It is believed that the site has an annual capacity of 24,000 tons.

Plants: Znojmo and Bucovice, Czech Republic; 6th of October City, Egypt; Capetown, South Africa
Processes: Spunbond, meltblown, SMS, bicomponent
Major Markets: Hygiene, agriculture, healthcare, ecology, furniture, building, protective apparel, industrial

Sales increased significantly for PFNonwovens Group due largely to the acquisition of First Quality Nonwovens in mid 2018 and will increase even more in 2019, the first full year that the businesses formerly operating as Pegas Nonwovens and First Quality Nonwovens combine to be one of the largest global producers of spunmelt nonwovens.

“Our production ran at full capacity without any major operational issues and sales kept up with the strong production volume,” says CEO Allen Bodford. “For 2019, we have budgeted annual sales to exceed $600 million due to the fact that the ex-FQN business will, for the first time, contribute with full twelve-month results.”

PFNonwovens, which was known as Pegas Nonwovens before it was purchased by Czech-based private equity group R2G Group, acquired the nonwovens business belonging to First Quality Enterprises in May 2018 for an undisclosed sum. The combination of two of the world’s largest spunmelt nonwovens manufacturers created a global operation with facilities in the U.S., the Czech Republic and China.

Even though the businesses have a lot in common, starting from production technology to common customers, Bodford admits that integration has not been without its challenges.

“Integration of the two businesses is not an easy task and will certainly take some time,” he says. “Especially the first year is the most difficult. We have, however, made good progress and are already seeing results, in the R&D area, best practices in operations, and corporate services. We are working on a global strategy that will add more common goals and objectives and bring a stronger presence of innovation for our customers globally. We will also continue to bring our systems together to operate seamlessly across all sites.”

Recent investments include a new line in South Africa, which has started commercial deliveries to its clients, and the installation of the new semi-commercial line in the Czech Republic.

“South Africa provides us with the potential to supply not only our current global clients but also smaller ones, local producers of disposable hygiene products, and thereby to broaden our customer portfolio,” Bodford says. “The semi commercial line in Znojmo brings new innovative products. We are very optimistic for our semi commercial line to bring new innovative products to our customers.”

The new semi-commercial line is based on the Reicofil 5 platform. It uses proven bicomponent technologies, offers a wide range of fiber types and fiber profiles, while enabling the use of input raw materials different to those that it currently processes. A significant element of this technology is also the nonwoven textile bonding system, which is an alternative to the presently used conventional systems.

“Due to its development potential, we consider this semi-commercial technology to be the fundamental building block for our newly built global innovation center and believe that it will help us to achieve significant success in research, testing and subsequent commercialisation of new products with applications for current as well as new markets,” Bodford says.

Plants: Znojmo and Bucovice, Czech Republic; 6th of October City, Egypt; Capetown, South Africa
Processes: Spunbond, meltblown, SMS, bicomponent
Major Markets: Hygiene, agriculture, healthcare, ecology, furniture, building, protective apparel, industrial

A new name, a new owner and new global operations are among the highlights for PFNonwovens, formerly Pegas Nonwovens, the Czech Republic’s largest nonwovens producer. In May 2017, Czech-based private equity firm R2G purchased a majority stake in the company. At the time of the acquisition, R2G said it hopes to turn Pegas into the truly global nonwovens operation, and so far the company seems to be on track to do just that. In May, R2G announced that it would buy the nonwovens operations of First Quality Nonwovens, including spunmelt assets in Pennsylvania and China, giving the company immediate entry into two of the largest nonwovens markets in the world.

“We believe strongly in the nonwovens business,” says Michal Smrek, CEO Of R2G. “This transaction will enable us and our group companies to support our global customers across four continents. Post transaction, we will have state-of-the-art production facilities and unrivalled know-how and R&D expertise to ensure that our customers benefit from the premium products we offer and the joint innovation and synergies that this combination will bring. When we acquired Pegas, we said that this was the first step to building a global platform. This transaction is the second step and we look forward to now investing into our global platform and the people that have made the production companies a success.”

Together, the two companies will make about 250,000 tons of nonwovens at sites in Pennsylvania, China, Egypt, South Africa and the Czech Republic. Total sales will be in the $550-600 million, making the company, which changed its name to PFNonwovens in June, one of the largest suppliers of spunmelt nonwovens to the hygiene market in the world.

Meanwhile, at PF’s existing nonwovens operations, the company continues to expand it scope globally by focusing on making state-of-the-art spunmelt nonwovens.

In 2017, the company’s sales rose 7% to reach €220.8 million ($264 million) thanks to increased capacity from new production volumes as well as higher polymer costs. About 87% of its sales are conducted within the global hygiene market while the remaining 13% are split between construction, medical and agriculture.

By region, the company’s largest segment is in Eastern Europe, comprising 41.6% of sales and Western Europe, which represented 36% of sales. The remaining are split around the world.

In investment news, PF is currently adding new lines in South Africa and the Czech Republic. In South Africa, PF purchased a plot of land and has ordered a production line, a S-Twin MB-S 2600 Reicofil 4S Compact bicomponent line, that will be able to make 10,000 tons of material per year. It is expected to come onstream in late 2018 or early 2019.

Pegas built a similar line in Czech Republic last year. “For South Africa, this investment represents a huge step forward in the area of nonwoven textile technologies for hygiene applications,” Rezac says. “We are excited about expanding into a new fast growing market and hope that it marks the beginning for further growth in the region. We expect that we will start to supply the first commercial products from the new production line at the beginning of 2019 so that we fulfill the long term agreement with one of our major customers for the delivery of a significant part of the new plant’s production output,” says Rezac.

Meanwhile, in Znojmo, Pegas announced in September it was adding a semi-commercial Reicofil 5 bico production line, which will be the building block of a new global innovation center. The line’s capacity will depend on the input of raw materials and the types of products made and will likely be in the range of 8000-15,000 tons per year. It will begin operation in the third quarter of 2019.

“By signing this memorandum, we have reached an important milestone of the project that we have worked on intensively with Reicofil for the last two years with the objective of developing a new type of technology,” Rezac says. “This new technology is based on the Reicofil 5 platform and the no-basement concept. It utilizes proven bicomponent technologies, offers a wide range of fiber types and fiber profiles while enabling the use of input raw materials different to those that we currently process..A significant element of this technology is also the nonwoven textile bonding system, which is an alternative to the presently used conventional systems.”