Malaysian hub serves Fibertex's expansion plans

KUALA LUMPUR: When Denmark's Fibertex Personal Care wanted to expand its operations in Asia a decade ago, it had a choice of four locations but none fitted its requirements as Malaysia did.

The others were either too expensive, competitive or "too young" to enter.

The decision to make Malaysia its regional hub now enables the company to expand its footprint in rapidly growing Asian markets.

Today, Fibertex's plant at Nilai 3 Industrial Park is poised to overtake its Danish operations when the fourth production line starts running by the end of the year.

Fibertex - one of the largest global manufacturers of spunbond/spunmelt nonwovens for the personal care industry manufacturing mainly nappies, sanitary towels and incontinence products - has already invested RM500 million in its plant.

Chief executive officer Peter Andersen said with the additional production line, Fibertex would be producing 70,000 tonnes of the nonwovens.

Seventy five per cent of its products are exported.

"Our single biggest market in Asia is Japan," he said at a media briefing here last week.

On a global scale, the company has a market share of about eight per cent, making it the world's fifth largest producer of spunbond products for the hygiene industry.

It is wholly-owned by industrial conglomerate Schouw & Co, which is listed on the Copenhagen stock exchange as a company with investments in wide-ranging industries such as agriculture, fish feed, biogas plants, venture investments as well as real property and shares in a wind turbine manufacturer.

It purchases its polypropylene - by-product of petroleum - from Petronas and other petrochemical companies and change it into fibres before the semi-finished products are packed off to the diaper companies. Fibertex's products are used in almost all major diaper brands, Andersen said.

Its built-up area is already filling up the 750,000 sq feet land size but Andersen said there is still time and other options to look at before the company shops for additional space.

Outside Malaysia, Andersen said India is the next obvious choice for the company to expand its production facilities. Costs in Japan are too high for production facilities while in the case of China, there are other competitors in the space.

Asia will soon overtake the European market in terms of contribution to the earnings, he said, without disclosing the comparative figures.

For 2102, the company clinched RM372 million in sales.

Fibertex has also embarked on an indepth study to introduce bio polypropylene into its products, and research is being undertaken in Denmark and Malaysia.

Should that be commercialised, Fibertex would the first company in the world to do so.