COLONIAL HEIGHTS, Va.—The new owners and management of Performance Fibers Inc.—formerly Honeywell Performance Fibers—are making investments in expanded capacities and research and development their top priority, according to the company top executive.
Among the investments could be a second fiber plant in China that would double the firm´s capacity there, said Gregory S. Rogowski, who was hired by new owner Sun Capital Partners Inc. to head up the business.
"Our capacities are maxed out across the board," said Rogowski. He said that since Honeywell International Inc. earmarked Performance Fibers for divestiture more than 18 months ago, investment opportunity was limited.
The maker of polyester yarn for tire and rubber products reinforcement recently completed a doubling of annual capacity at its Kaiping, China, joint venture facility. The firm is evaluating its options to double it again this year or next to 60,000 metric tons, Rogowski said. The company is looking at several scenarios, including setting up a second factory on its own.
"The demand is there," according to the executive. "We´re actually exporting product from the U.S. to China to satisfy demand."
Reflecting the growth possibilities is an increase in sales of nearly 9 percent last year, to $400 million, and projections of a 10- to 15-percent advance this year.
"We see strong demand globally, led by China at 15 to 20 percent," Rogowski said. "Growth in North America and Europe should be in the 4- to 6-percent range."
Demand for tire-reinforcing materials in North America actually is growing faster than shipments themselves, he said, as tire makers convert more and more capacity to larger sized tires, especially for the sport-utility vehicle market. Tire producers also are turning to slightly more robust constructions to meet the more stringent federal tire safety standards coming in the next few years.
Besides expanding in China, Performance Fibers is adding capacity at its Moncure, N.C., plant for its Beltec polyester-based fiber for radial tire belt overlays. Rogowski declined to say which tire makers are planning to use the material as a replacement for nylon, but the fact the firm is putting in commercial-scale capacity reflects management´s belief in the product´s potential.
In addition, Performance Fibers has a new product in final testing, dubbed A360 internally, targeted as a replacement for rayon fiber in high-speed performance tires, Rogowski said. The company plans to install commercial-scale capacity for the material at its Longlaville, France, facility later this year.
Performance Fibers´ sales are split roughly 50/50 between tires and non-tire applications, Rogowski said. Seat belts, air bags, polyvinyl chloride-coated fabrics and other rubber goods make up the latter half.
For now, Performance Fibers is committed to its core business of developing and producing reinforcing yarns and fabrics. Management is keeping an eye on the market trend of fabric makers moving downstream into the fabric converting sector, Rogowski said. Performance Fibers is content to work closely with specific converters in key markets.
Looking ahead, Performance Fibers intends to step up its R&D effort into its Pentex polyethylene naphthalate fibers, which management believes will become the fiber of choice for tire makers in the near future, he said.
Boca Raton, Fla.-based Sun Capital, the new owner, is a private investment firm. The deal, for an undislcosed sum, closed Dec. 22.