Glatfelter will invest approximately $80 million to build a new production facility in the United States for its Advanced Airlaid Materials business (AMBU). The company is currently evaluating location options, primarily in the southern United States.
“Our Advanced Airlaid Materials business is a global growth platform that has a unique opportunity to capitalize on increasing and unmet demand in North America for the materials used in lighter-weight hygiene and disposable wipes products,” said Dante C. Parrini, Chairman and Chief Executive Officer. “Our plan to build this new facility is in direct response to customer needs for increased capacity in a tightening North American airlaid market.”
The new facility is expected to have an annual capacity of approximately 22,000 short tons, increasing the Company’s total global airlaid materials capacity to approximately 129,000 short tons. In support of market growth, the investment is supported by customer commitment to purchase a significant amount of the annual capacity. In addition, the new facility will establish a specialty asset base in the United States and create a center of excellence for other lighter basis weight products. The Company anticipates production will start in approximately two years and the project will be funded by a combination of cash on hand and its existing credit facility.
“We are planning to locate this facility in close proximity to several key customers and highly efficient transportation routes in the southern U.S., as well as where we have additional access to a high-quality, skilled workforce,” said Chris W. Astley, Senior Vice President & Business Unit President, Advanced Airlaid Materials. “Identifying an optimal location for this facility will provide Glatfelter and its customers with logistics and supply chain benefits, and opportunities for collaboration. Our Advanced Airlaid Materials business enjoys excellent customer relationships, and we expect this new facility will provide us with additional competitive advantage to support long term growth.”
Glatfelter’s Advanced Airlaid Materials Business Unit has leading positions in the feminine hygiene, adult incontinence, wipes and home care markets globally, and its products are also used in food packaging and industrial applications. Its existing production facilities are located in Canada and Germany.