Glatfelter to Expand Composite Fibers Capacity

Glatfelter, York, Pa., USA, a global producer of specialty papers and fiber-based engineered materials, this week announced capacity expansion plans for its Composite Fibers business unit, that serves the growing global tea and single serve coffee markets, among others. The company will invest $50 million at its Gernsbach, Germany, facility to expand its inclined wire capacity by nearly 20%, or approximately 10,500 short tons, by converting a conventional flat wire paper machine to a state-of-the-art, inclined-wire paper machine used to manufacture filter papers for tea bags and single-serve coffee applications as well as certain composite laminate products and technical specialties.

Dante C. Parrini, chairman and CEO, said that "shipments for our Composite Fibers business have increased by approximately 20% over the past two years, led by the strong worldwide demand for beverage filter papers. While our continuous improvement initiatives have generated significant incremental capacity, the rapid growth of this business is simply outpacing our organic capacity gains. This expansion will not only allow us to continue to meet the growing demand of our market-leading customers with sophisticated and innovative products, but it will solidify our leading position in this rapidly growing global category."

The project will take place primarily in 2012, with the new machine expected to begin production in the first quarter of 2013. The company says it expects to achieve a 15% to 20% return on this investment within three years, has ample liquidity to fund the project, and expects it will be financed from cash balances or the company's revolving credit facility.

Iggesund Paperboard produces Invercote, a solid bleached board, at its mill in Sweden. In England the company makes Incada, a folding boxboard. "All of our paperboard products are made exclusively with virgin fiber," Mallinson says. "It gives us the best performance in terms of how much material is required to protect the packaged product. And of course there is absolutely no worry in terms of hygiene and purity, factors that are becoming more and more important. The big advantage of virgin fiber is that we know where it comes from and what properties it has, which is unfortunately not always the case with recycled fiber."

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