Streamlining at Ahlstrom

Nonwovens leader Ahlstrom has invested some €55.4 million so far this year, in projects including the new joint venture for the production of crepe papers in Longkou, China, a wallcovering materials production line in Binzhou, China, and a filtration materials capacity increase in Turin. A further €10 million is now to be invested at the Turin site to upgrade a paper machine producing filter media for transportation and gas turbine applications.

In addition, the €20 million acquisition of Munktell Filter AB represents another strategic in expanding the advanced filtration business particularly in life science and laboratory applications.

And following the disposal of its Label and Processing business to Sweden’s Munksjö AB, Ahlstrom is now well positioned to focus on its value-added business areas – Building and Energy, Filtration and Food and Medical.

The company is now undertaking a number of development programmes, aimed at enhancing the planning and harmonisation of common processes, aiming to increase customer focus and enhance the management of its entire product and supply chain.

As part of a profit improvement initiative, the company has also shed some 362 jobs at plants including Karhula in Finland, Bishopville in the US, Turin in Italy, Jacarei in Brazil and Osnabrück in Germany, aiming at saving €15 million annually from 2012.

Ahlstrom’s sales from January-September 2012 fell by 2% to €1,210.7 million, compared to €1,235.9 million in the same period in 2011. The decline was mainly due to lower sales volumes and capacity closures, although a favourable currency effect, mainly as the US dollar appreciated against the euro, had a positive impact.

Total sales volumes in tons fell 4.9%, with those in the Building and Energy business down 25%, or -5.1% excluding capacity closures.

Operating profit, however, was €33.9 million compared to €24.3 million for the nine months a year earlier. Despite lower sales volumes and increased energy costs stemming from higher natural gas prices in Italy and Brazil, the company’s profit improvement programme, efficiency gains in the supply chain and higher selling prices served to boost performance.

Meanwhile, the commercialisation of the company’s biodegradable teabag material line in Chirnside, Scotland, and its medical material plant in Mundra, India, continue.