Providência USA Breaks Ground
Brazilian nonwovens manufacturer invests $80 million to build 90,000-square-foot spunbond facility in Statesville, NC.
Janet Bealer Rodie, Managing Editor
Brazil-based nonwovens producer Companhia Providência Indústria e Comércio recently broke ground to build its first manufacturing plant in North America after suspending earlier plans in the wake of the global economic crisis (See " Brazilian Firm To Establish US Nonwoven Operation," TW, September/ October 2008).
The company's U.S. subsidiary, Providência USA Inc., is investing $80 million to build a 90,000-square-foot facility on a 43-acre plot of land in Statesville, N.C., and install machinery for the manufacture of spunbond nonwovens, with a focus on hygiene and medical fabrics markets. Although it is a smaller project than was originally conceived, it still represents a substantial investment - the largest new capital project in Statesville in more than ten years, according to Greater Statesville Development Corp. Chairman Bill Leach. The facility, which initially will include 20,000 metric tons of spunbond capacity per year and provide employment for 56 people, is expected to become operational in the first half of 2011.
Providência USA initially will be equipped with one Reicofil spunbond line similar to this line installed in Brazil. The Statesville facility eventually will house four Reicofil lines.
From Plastics To Spunbonds
Established in southern Brazil in 1963 to manufacture plastic food packaging under the Providência brand, the company added production of polyvinyl chloride pipes in 1978 -- a business that it sold in 2008 -- and in 1988 entered the nonwovens arena, establishing those product offerings under the Kami brand. Its first nonwovens production line featured Reicofil spunbond technology from Germany-based Reifenhäuser GmbH & Co. KG for the production of durable goods, and Providência over the years has added nine more Reicofil lines and expanded its production to include disposable fabrics, which now comprise the major part of its nonwovens product portfolio. In tandem with its expanding operation, the company also has widened its market exposure, first into South and Central America, and then into other foreign markets including North America.
Providência has limited its nonwovens production to spunbonds, believing that by doing so, it has been able to achieve economies of scale as well as synergies and cost efficiencies within its production. The company claims to be the largest nonwovens manufacturer in Latin America, supplying disposable spunbonded fabrics to customers in hygiene and healthcare markets; and durable spunbonds for furniture, mattress and bedding, packaging, shoe, luggage, automotive, civil engineering, sports apparel and other applications. Its expansion in the nonwovens sector also includes the establishment in 2005 of two distribution centers in the United States -- one in Charleston, S.C., and one in Columbus, Ohio -- to serve its North American customers, which include Procter & Gamble, Johnson & Johnson and Kimberly Clark, among others. In addition, in 2007, Providência acquired Brazil-based spunbond manufacturer Isofilme Indústria e Comércio de Plásticos Ltda., which produces printed and unprinted simple and composite nonwovens in various weights.
Providência’s product portfolio includes both disposable and durable spunbond fabrics, marketed under the Kami brand. These printed durable products are made in Brazil but are available to the company’s U.S. customers through its distribution facilities.
North American Expansion
In the interest of further growing its share of North American markets, Providência in July 2008 formed Providência USA, with the plan to invest $120 million to purchase land and build a manufacturing facility housing two Reicofil lines with combined production capacity of 40,000 metric tons. As mentioned earlier, the original plans were laid aside as the global economy moved into recession, and were resurrected on a smaller scale in autumn 2009.
In announcing the resumption of the company's plan, Providência CEO Herminio Freitas told community leaders and others at a recent gathering in Statesville: "For some time now, we have been examining the company's structure and consequently its capacity, but with the world financial crisis, we had put new investments on hold. In the past few quarters, we have noticed the increase in demand and the resumption of this project will be instrumental in meeting this need - increasing our production capacity to 100,000 tons per year."
According to Mark Jones, project manager for the U.S. venture, the initial phase will include one Reicofil production line, with three more to be added at a later time.
"The site that we have purchased will eventually house four production lines, but we have not published a timetable for the subsequent phases of our North American growth," Jones said. "Our current plans include the installation of the newest Reicofil technologies, along with certain proprietary adjustments with which we have had very good success," he added.
Jones said that although the line to be installed in Statesville will be capable of producing spunbonds for all the markets in which Providência participates, the focus of the U.S. operation will be the hygiene and medical fabrics markets.
"We will continue to utilize our Kami brand," he continued. "It is our trademark in Latin America, and we expect to grow the Kami brand and its recognition in the North American market."
The company also plans eventually to consolidate all warehousing activities at the Statesville site. "While we expect to be able to service our initial customer production requirements with our new line, we do have additional warehouse capacity in Statesville in the event that we need to import additional materials from Brazil," Jones explained. "We expect to utilize this additional warehouse space as we grow our North American business."
Quality Of Service
As Critical As Product Quality
As an important element in Providência's strategy to expand its presence in markets outside of Brazil, the new U.S. operation, which is led by General Manager Gene Konzcal, is expected to enable the company not only to decrease logistics and distribution costs, but also to improve the quality of its service in the North American market.
"We have seen our products perform in a superior way in every market and every region in which we have participated," Jones said. "However, product quality alone is not sufficient, as we recognize that quality of service is also critical for our customers. One of Providência's main goals towards our customers is to improve its product and service qualities. Hence, a local operation in the United States, a key market to the company, will enable us to provide cost-competitive and state-of-the-art products along with improved service levels."