North America Report

Earlier this year, INDA, the Association of the Nonwovens Fabrics Industry, published its second edition of the annual North American Nonwovens Supply Report. In 311 pages featuring tables and figures, the report provides key metrics of capacity, production and operating rates for the total North American nonwovens industry by nonwoven process.

Nonwovens Industry reached out to Brad Kalil, director of market research and statistics at INDA, to discuss the association’s findings.

Nonwovens Industry (NWI): Please tell us exactly what this report includes and what it aims to do?

Brad Kalil (BK): INDA has undertaken this study to fulfill the element of its mission to provide credible statistics to its members and the overall industry. This is INDA’s ninth analysis report on the nonwovens industry of North America. This report presents the detailed demand and supply data (capacity, production, and trade flows) for the North American nonwovens industry for 2008 and 2013, and a forecast for 2018. Specifically the goals of the report were to:
– Provide economy and demographic trends, as they are significant drivers of demand within the North American nonwovens industry;
– Develop industry consumption figures by sales, square meters, and tonnage for nonwoven fabrics in 12 end use markets and their numerous subcategories for 2008 and 2013, and provide a forecast for 2018;
– Explain industry trends within the end use markets;
– Develop an overall picture of the North American supply with capacity, production, and trade flow data for 2008 and 2013 and a production forecast for 2018; and
– Define and clarify end use market segmentation and production processes to provide greater clarity in the industry.
While no study is perfect, INDA has taken the time and applied its knowledge to make this the as accurate and comprehensive as possible.

NWI: Who will benefit from this report?
BK: This information is intended to assist those in the nonwovens industry in making better business decisions. Anyone involved in the nonwovens industry from raw material suppliers and machine manufacturers to nonwoven producers, converter and brand owners.

NWI: Based on this, how would you characterize the North American market in general?
BK: Strong and steady. Over the last 24 years (1990 to 2014), the North American nonwovens capacity has increased on average of 5.5% a year, easily outpacing U.S. real GDP, which grew at 2.5% during the same period (see figure on page 31). During this time, the industry has more than quadrupled in size, adding 1.949 million tons. Though, volume growth through the historical period (2008-2013) of the North American Nonwovens Industry Outlook report was minimal due to the recession and slow economic recovery, resulting in slow growth across the disposable categories (with the exception of wipes) and durable categories (with the exceptions of transportation and other durables). The recession severely impacted building construction, the largest of the durable categories, with negative growth in both tons and square meters.
 
NWI: Which end use categories really stood out as real growth drivers? What were some of the factors driving this growth?
BK: The most significant drivers of demand for the North American nonwovens industry are economic and demographic trends. Consumer discretionary spending and business investment—both correlated to the strength of the economy—drive demand in nearly every nonwoven end-use category. For the U.S., it’s been a long climb out of the valley of recession, but the economy is now on a solid footing, with conditions in place for a strong economic recovery.  
With the outlook of both the improving economy and certain demographic trends (births and aging), the consumption of products used in North America is forecast to improve, resulting in the square meters of nonwoven material increasing 4.3% annually and tonnage increasing 5.1% annually. This growth will be led by the ever-expanding wipes (fastest growing of the disposable categories) and transportation markets (fastest growing of the durables), the aging boomers and the predicted boomer echo increasing demand for absorbent hygiene products (largest growing of the disposables), the return of the building construction market, particularly non-residential and government regulation driving growth in the geosynthetic materials market (largest growing of the durables) (see figures on page 32.

NWI: Did you see any new significant categories for nonwovens?
BK: Nonwovens constantly appear in unique and novel applications as nonwovens can be engineered to meet specific performance attributes for a specific end use. Much of this growth has been in composite applications, resulting in the other durables category growing over 6% annually.

NWI: Are you seeing any categories going down significantly?
BK: Not going down, but a slower growth rate through the forecast period than the historical period, that is the disposable medical/surgical category. In INDA’s 2010 study of the North American industry, it was thought that nonwoven-based medical and surgical products sales were at best flat and possibly declining. The consumption drop appeared to be due to changes in how healthcare was being provided. There is a trend toward fewer invasive surgeries, with many being conducted in an outpatient setting at an ambulatory surgical center (ASC), bypassing the need to use a full operating room in a hospital.  While medical and surgical products are used in these smaller operations, they do not require the number of apparel items that would be used in a full operation. Surgical packs can also be specialized for specific operations that may require fewer or smaller-sized pack parts. However, the predicted decline or flattening in the use of disposable nonwoven medical and surgical products did not occur. This is due to an increasing volume of patient activity attributable to an aging population, a rising incidence of medical conditions, and a broad category of influences termed health care economics.

NWI: How would you characterize the current rate of investment in the North American nonwovens market?
BK: Also strong and steady. In terms of capacity additions in North America eight new lines were added in 2013, five in 2014 and perhaps another five or six lines will be added in 2015. Another indicator of investment is the level of acquisitions, by those within the nonwovens industry and also those outside of the industry.

NWI: How are nonwovens helping drive economic growth in the Southeast U.S.?
BK: Significantly. Just within North Carolina are 955 operating companies, institutions and consultants within the nonwovens industry with over 24,000 employees. In just the last three years, over $550 million was invested in 20 nonwovens projects in North Carolina that added 680 jobs and $30 million in new payroll.
Nonwovens, though, are produced, fabricated and converted throughout North America, so wherever there are concentrations of certain end uses, you will find nonwoven investments.

NWI: What role does Mexico play in the North American nonwovens industry?
BK: Mexico – which accounts for 6% of the North American economy and a quarter of the population—seems to have made its much-expected turn and will outpace both the U.S. and Canada over the forecast period. Strong economic and nonwovens growth is projected over the forecast period as the effects of structural reforms begin to come into play and U.S. growth strengthens.

NWI: What were some of the big surprises you found?
BK: Just how pervasive the use of nonwoven materials are. We are constantly hearing of new markets within existing categories, the gaining of share from other materials in existing end use categories and the entering of entirely new end uses.