Interview with Johan Berlin

We have seen a continuously increasing demand for used nonwoven and absorbent hygiene equipment during the last decades, particularly used nonwoven machinery. In recent years, we have made efforts to expand our network of existing producers and potential new ventures. In addition to constantly strengthening and broadening our network, we strive to improve our ability to match buyers and sellers of equipment. By keeping ourselves updated and constantly gathering information, we increase our knowledge of producers' current production resources and their possible procurement and/or divestment needs. This strategy and a strong focus on increasing our knowledge of the players in the nonwovens and absorbent hygiene industry naturally generates more business. We believe that the market for used equipment will continue to grow, and the potential for growth is especially strong in India - both in terms of absorbent hygiene products as well as nonwovens. However, what is worth noticing is that in terms of quantity of single machines sold, it was much larger in the conventional textile business. During those days, we completed may be 30-40 deals over a year in conventional textiles. In the nonwovens, it may be 10-20. So, the difference is quite big. Of course, investments are also higher, and the need to deliver a more precise solution is also higher.

The most important criterion concerns deciding which market you want to break in to. The initial question to pose is which product you want to produce. Before selecting a production line and starting to produce a certain type of roll goods, you must have a clear idea of what the final product should be. For nonwovens, this process can be a bit more complex compared to the choice of conventional textile equipment. To start a weaving mill, it is enough to know that there is a demand for woven material. To start the production of nonwoven rolls, you need to know that there is a need for specific end products like air filters. Then, you also need to know that there is access to converting industry that can transform the nonwoven rolls into filters.

The composite materials will of course be large in Asia. Apart from that, it's difficult to point out at anything special. But anything that comes up with a good solution to the issue of waste management can probably make a fortune.

The obvious obstacles are the lack of a market, partially due to lower income levels and partially due to lack of knowledge about the products. One large obstacle inhibiting growth of nonwovens in India and other parts of the Asian market is also a lack of converting capabilities. With more converters that would know how to market and to whom to market the various converted nonwoven roll-goods, the better it would be for everyone. Now we see a tendency that some converted products are imported into India, even though the basic roll-goods are already manufactured in this very country.

We see that great investments have been made - both in the absorbent hygiene industry, eg SCA and in the nonwoven industry, eg Global Nonwovens, running India's first six beam spunmelt line. We believe that the investments in the absorbent hygiene industry will continue. Due to demographic factors (high birth rates), rising income levels (growing middle class) and increased awareness regarding the health benefits, we see an increased demand for baby diapers, sanitary napkins and incontinence products. The automotive industry will also continue to grow, with more cars and transport vehicles being manufactured in India and a larger part of the materials being continuously replaced with nonwovens. The same goes for the filtration market; in pace with or in line with sharper regulations concerning emissions from heavy industries, more filter products will be needed. And last but not least, the geotextile market should grow, although the problem is again regulations. There's no real benchmark on which kind of geos should be used for various projects, and even if there is, it is not actively controlled or enforced by the purchaser (often government or other state body).

If you are referring to India in particular, it does not have a huge impact at this particular moment. But, it does not take much imagination to see how this will also be a trend in India. I think that the main worry is about landfills and the issue with various sanitary products being placed in landfills. This issue, however, needs to be solved on a broader scale. Personally, I do not believe that this is going to be solved fully by bio-degradable products. And, even if it would be financially viable with such products, the problem with health issues and rag-pickers would remain. The bio-degradable diaper or sanitary napkin can have a future as long as it is placed in a guarded or enclosed landfill, and let it bio-degrade there. But that would also call for sorting of the product at source, and I find that highly unlikely at the moment. Thus, I believe that incineration is the best alternative. But that's not only up to the absorbent hygiene products' producers to handle. There are many other products and producers that jointly should take responsibility and action towards minimising the landfills in general in India. If we look at other parts of the world, SCA is a prime example of showing how sustainability can be made into a marketing tool. Various campaigns on social media such as tree-planting and get-togethers have proved this, not only in the western society but also in China.

Narendra Modi's 'Make in India' campaign will generate great benefits for the nonwovens and absorbent hygiene industries. But of course, we would have preferred a particular focus on these industries in the campaign. Still, it's important to note that the potential growth for nonwovens is strongly associated with growth and investments being made in other industries. For instance, a strong development in the automotive industry along with the 'Make in India' campaign initiatives for strengthening of automobile and automotive components industries will affect the nonwovens industry in a positive way. The presence of nonwovens is steadily increasing in the automotive sector. Today, more than 40 automotive parts are made with nonwoven fabrics, from interiors like carpets to air and fuel filters. It is also important to note that for the nonwovens industry, India should consider the 'Make in India' campaign as something which is both - made in India and consumed in India as well. Exporting nonwovens out of India at this time seems pointless, when so much of nonwovens needed domestically is still being imported. I think that this is something that many producers tend to forget.

Currently, we are fully occupied with the commitment to these two industries. We believe we can offer our customers a better service and develop greater expertise, if we keep focusing on nonwovens and absorbent hygiene equipment only.

The market size for machinery is very difficult to estimate. The market size for products in the nonwovens sector is between USD 25-30 billion annually, and is expected to grow to USD 45 billion by 2019. So, there's certainly room for growth. Considering that the price for a line can vary from USD 200,000 (simple Chinese-manufactured needlepunch line) up to USD 45 million (complete Reicofil 4 spunbond line with all bells and whistles), it's impossible to put a number on the equipment sales worldwide. The majority of the buyers of equipment are in China. But, they mainly buy domestically produced Chinese machinery. Apart from that, majority of equipment buyers are in the US and Europe, with a focus on already existing nonwoven companies upgrading or substituting older lines for more modern lines. India is still placed quite low on the ladder, when it comes to equipment (new equipment) purchasing.

At Investkonsult, we can supply full turnkey installations as well as only sell the equipment as it is. Since our main segment is used equipment, it is usually not sold with any type of guarantees. It is sold "as is - where is", unless, of course, we undertake a full turnkey operation, as then it becomes our responsibility to put it into working condition, no matter what. In that case, we will provide that. Apart from that, we are known to take responsibility at a far larger stretch than most of our competitors. We usually assist our customers several years from a purchase with advice, contacts and even mechanical help and fine-tuning of their lines, even though it may not have been a part of our original commitment or undertaking.