AIR FILTRATION MARKET UPDATE

October 2011

McIlvaine Company

www.mcilvainecompany.com

 

The Filter Efficiency section of the Products, Performance and Costs Chapter has been updated to reflect changes in ASHRAE 52.2 and EU 779 standards. Click here to view.

TABLE OF CONTENTS

INDUSTRY

Filtration 2011 at Chicago’s Navy Pier

ASHRAE, AHR Expo Return to Chicago for 2012 Winter Conference

CONSTRUCTION

U.S. Housing Starts Down in August, Permits Up

Architecture Billings Index Turns Positive after Four Straight Monthly Declines

FINANCIALS

Donaldson Reports Record Fourth Quarter and Full-Year Results

Clarcor Reports Solid 3rd Quarter Results

COMPANY NEWS

Freudenberg to Make Filters in Western China

CECO Environmental Announces Sales Partnership for Continued Expansion in India

Hollingsworth & Vose Announces R&D Grant Award from the State of Virginia

Cummins Sells Diesel, Small Engine Filtration Business

Montreal’s Noveko Secures $6 million to Expand Filtration and Medical Markets

NEW PRODUCTS

K-C Gets FDA Clearance for Child's Face Mask

Donaldson’s New 3-in-1 Compressed Air Filter—High Efficiency, Reduced Install Space

Oreck Launches DualMax™ Dual-fan Air Purifier

Franklin New Adhesives Offer Strength, Speed and Convenience

Many projects, mergers and acquisitions are detailed in monthly updates in the Market Report’s Chapters under Industry Analysis. Click on the links below to view current updates for each industry.

 

AEROSPACE

FOOD

DISK DRIVE

FLAT PANEL

METALWORKING

OTHER ELECTRONICS

PHARMACEUTICAL

POWER

PULP MILLS

SEMICONDUCTOR

TRANSPORTATION

 

 

INDUSTRY

Filtration 2011 at Chicago’s Navy Pier

INDA’s Filtration 2011 International Conference & Exposition will be held November 15-17, 2011 at Navy Pier in Chicago, IL. The 20th anniversary of the show will feature over 120 exhibitors and several conference sessions including an introduction to filtration, insights into progress and future trends in filtration, and charged vs. mechanical filtration panel discussions.

ConnectME Mobile, an innovative smartphone application, will be offered for the first time to attendees. In addition to an electronic show guide and event planner, this app gives a quick and easy way to connect with exhibitors via an automated matching component. http://www.inda.org/events/filt11/index.html

 

ASHRAE, AHR Expo Return to Chicago for 2012 Winter Conference; Largest Ever

The 2012 AHR Expo is already the largest in its 82-year history. Nearly 413,000 ft2 (38 368 m2) of exhibit space has been sold for the Jan. 23–25 event in Chicago. More than 1,700 exhibitors have bought space.

Attendees have the chance to discuss and examine the latest topics in the building industry, such as high performing buildings and integrated design, as well as participate in technical tours; attend ASHRAE Learning Institute courses; earn professional credits; and obtain ASHRAE certifications.

The 2012 Winter Conference takes place Jan. 21-25 at the Palmer House Hilton. The International Air-Conditioning, Heating, Refrigerating Expo®, held in conjunction with the Winter Conference, will run Jan. 23-25. The Expo is held at the McCormick Place.

In keeping with ASHRAE’s goal of continuing education the Conference offers over 200 Professional Development Hours, as well as Continuing Education Units, which can be applied toward a Professional Engineering license. www.ahrexpo.com

CONSTRUCTION

 

U.S. Housing Starts Down in August, Permits Up

August housing starts in the U.S. were 571,000, down 5.0 percent from the prior month and down 5.8 percent from the prior year. New construction of single-family houses decreased 1.4 percent to a 417,000 rate in August from the prior month. Work on multifamily homes, such as townhouses and apartments, fell 13.5 percent to an annual rate of 154,000.

Starts dropped in two of four regions, led by a 29.1 percent decline in the Northeast last month when Hurricane Irene pushed ashore.

 

Building permits in August 2011 were 620,000, up 3.2 percent from July and up 7.8 percent from August 2010, the highest this year and a sign construction may stabilize. Permits climbed in three of four regions, led by an 11.3 percent jump in the West. They climbed 6.3 percent in the Midwest and 3.3 percent in the Northeast.

 

Architecture Billings Index Turns Positive after Four Straight Monthly Declines

The Architecture Billings Index (ABI) took a sudden upturn in August after a period of weakness in design activity. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending.

The American Institute of Architects (AIA) reported the August ABI score was 51.4, following a very weak score of 45.1 in July. This score reflects an increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 56.9, up sharply from a reading of 53.7 the previous month.

"Based on the poor economic conditions over the last several months, this turnaround in demand for design services is a surprise," said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. "Many firms are still struggling, and continue to report that clients are having difficulty getting financing for viable projects, but it’s possible we’ve reached the bottom of the down cycle."

Key August ABI highlights:

  • Regional averages: Midwest (49.0), South (47.4), West (47.4), Northeast (46.5)
  • Sector index breakdown: mixed practice (50.9), institutional (48.5), commercial / industrial (46.0), multi-family residential (44.8)
  • Project inquiries index: 56.9

The regional and sector breakdowns are calculated as a 3-month moving average, whereas the index and inquiries are raw numbers.

 

FINANCIALS

 

Donaldson Reports Record Fourth Quarter and Full-Year Results

Donaldson Company, Inc. (NYSE: DCI) announced its financial results for its fiscal 2011 fourth quarter and year end. Net sales were $625 million for the quarter. For the year ended July 31, sales were up 22 percent to $2,294 million. The company’s results were positively impacted by foreign currency translation, which increased sales by $49.8 million.

(millions, except per share data)

   

Three Months Ended

   

Twelve Months Ended

   

July 31

   

July 31

   

2011

 

2010

 

Change

   

2011

 

2010

 

Change

Net sales

 

$625

 

$515

 

21

percent

   

$2,294

 

$1,877

 

22

percent

Operating income

 

90

 

75

 

21

percent

   

315

 

238

 

32

percent

Net earnings

 

66

 

51

 

29

percent

   

225

 

166

 

36

percent

Diluted EPS

 

$0.84

 

$0.65

 

29

percent

   

$2.87

 

$2.10

 

37

percent

 

Segment Details (in thousands):

Three Months Ended

 

Twelve Months Ended

   

July 31

 

July 31

   

2011

 

2010

 

2011

 

2010

Engine Products segment:

               

Off-Road Products

 

$90,885

 

$65,096

 

$327,557

 

$222,329

Aerospace and Defense Products

 

27,111

 

27,170

 

104,883

 

111,977

On-Road Products

 

38,381

 

24,146

 

127,107

 

81,874

Aftermarket Products

 

236,351

 

196,984

 

861,393

 

691,899

Retrofit Emissions Products

 

5,267

 

3,550

 

19,555

 

17,928

Total Engine Products segment

 

$397,995

 

$316,946

 

$1,440,495

 

$1,126,007

                 

Industrial Products segment:

               

Industrial Filtration Solutions Products

 

$138,637

 

$112,691

 

$507,646

 

$423,050

Gas Turbine Products

 

40,119

 

41,458

 

154,726

 

150,131

Special Applications Products

 

48,699

 

44,148

 

191,162

 

177,876

Total Industrial Products segment

 

$227,455

 

$198,297

 

$853,534

 

$751,057

                 

Total Company

 

$625,450

 

$515,243

 

$2,294,029

 

$1,877,064

Engine Products segment sales increased 26 percent to $397,995 million compared to the 4th quarter sales last year. For the year end July 31, 2011 sales in this segment were $1,440,495.

Industrial Products segment sales were $138,637 million for the quarter, with full year sales at $853,534.

The company states that current order trends remain healthy and continue to forecast that sales will grow 7 to 15 percent in FY12, $2.45 to $2.60 billion. Full year sales of Engine Products are forecasted by the compay to increase 8 to 15 percent.

The company forecasts full year sales of Industrial Products to increase 7 to 15 percent. Industrial Filtration Solutions' sales are projected to increase 7 to 14 percent assuming demand for new filtration equipment and replacement filters both continue to improve with increased global general industrial capital activity and spending.

They anticipate Gas Turbine Products' sales to be up 14 to 22 percent due to an improvement in the power generation market and ongoing strength in the oil and gas market segment.

Special Applications Products' sales are forecast to increase 2 to 9 percent primarily due to growing sales of their membranes products.

 

Clarcor Reports Solid 3rd Quarter Results

Clarcor reported its financial results for the third quarter of 2011. Compared with the same period last year, net sales increased eight percent to $284.8 million, and operating margin improved 0.4 percentage points. Net earnings were $32.1 million for the quarter, up from $28.3 million in Q3 2010.

For the first nine months of 2011, net sales were $819.1 million, an 11 percent increase from the same period last year, and a 1.7 percentage point improvement in operating margin was reported.

The company states that their filter markets are expected to grow, evidenced by the $28 million investment over the next three years to expand the heavyduty engine filter capacity in the U.S., specifically at the Baldwin manufacturing facility in Yankton, South Dakota.

Engine/Mobile Filtration Segment net sales increased $10.7 million, or 9 percent, compared with the third quarter of 2010. This increase in net sales was primarily related to higher volume and pricing of heavy-duty engine filter sales in the U.S. Slower growth outside the U.S. was influenced by a 13 percent reduction in net sales in China as some OEM customers adjusted production schedules and sold down existing inventory. China heavy-duty engine filter sales are expected to return to higher growth in the fourth quarter and full year growth is expected to be approximately 30 percent.

Industrial/Environmental Filtration Segment net sales increased 11 percent to $132,380 from the third quarter of 2010. Net sales in the U.S. increased 16 percent while net sales outside the U.S declined 2 percent (11 percent when adjusted for changes in foreign currency exchange rates). The slower growth outside the U.S. was influenced by lower sales in Europe in part due to the timing of larger system sales in Germany and less favorable Euro zone economic conditions. Growth in domestic sales was the result of higher natural gas vessel sales, increased sales of new air filtration products and incremental sales from the acquisition of TransWeb.

Operating profit in the Industrial/Environmental Filtration segment increased $0.8 million, or 6 percent, from the third quarter of 2010. 10.3 percent operating margin in the third quarter declined 0.5 percentage points from last year primarily due to additional costs to launch a new air filtration product and a higher mix of capital vessel versus aftermarket filter sales in the natural gas market. With a 9.8 percent operating margin in the first nine months of 2011, the company expects to exceed an operating margin of 10 percent in this reporting segment for the full year.

 

COMPANY NEWS

 

Freudenberg to Make Filters in Western China

Freudenberg Filtration Technologies will establish a new filter production site in cooperation with the Japan Vilene Group Ltd. in Chengdu (Sichuan Province, China). The site will be operational in January 2012.

The new company FreudenbergVilene Filter (Chengdu) Co., Ltd will be the third filter manufacturing site for Freudenberg Filtration Technologies in China. The other sites are located in Suzhou and Changchun. The new site in the Central Western part of China will operate particularly in the automotive filter segment, which has been experiencing remarkable growth. The production of both engine air intake filters and cabin air filters is expected to begin in August 2012.

Major automobile manufacturers such as First Automotive Works Volkswagen and Geely Volvo have settled their manufacturing plants in the Chengdu area. Automobile production in this region is expected to increase significantly in the following years, from 1.8 million units in 2011 to three million units in 2015.

 

CECO Environmental Announces Sales Partnership for Continued Expansion in India

CECO Environmental Corp., a leading provider of air pollution control and industrial ventilation systems, announced recently that it has recently entered into a sales partnership with Empire Industrial Equipment, a division of Empire Industries Ltd., one of the leading conglomerates in India, to jointly expand CECO’s presence in India.

Empire Industries Ltd. is a 108 year old successful and well respected industrial firm in India with over 1,000 employees. Empire Industrial Equipment, established in 2000, has offices in key customer locations throughout India. They are closely linked to major end user customers in the energy, refinery and petrochemical industries and have successfully introduced many new technologies and products.

Jeff Lang, CECO’s Chief Executive Officer, commented, "We are very pleased to be partnering with Empire Industrial Equipment and the entire Empire Industries family of companies. Their management team has significant history and experience in India which we believe will provide immediate benefits to CECO’s position in the Indian market. We are excited with the growth prospects in this market and expect it to contribute to our continued growth in the global air pollution control sector."

 

Hollingsworth & Vose Announces R&D Grant Award from the State of Virginia

H&V has been awarded a $750,000 grant from the Virginia Tobacco Commission to be used for research and development in several filtration markets. The Tobacco Commission seeks to promote economic revitalization of tobacco dependent regions by providing grant funding to entities in Virginia engaged in applied research with significant commercialization potential.

 

Cummins Sells Diesel, Small Engine Filtration Business

Engine-builder Cummins Inc. agreed to sell its light-duty filtration operations to an investor group for an unreported price. Cummins’ Kuss Filtration business in Findlay, Ohio; the Cummins Filtration plant in Bloomer, Wisc.; and Kuss plants in Brazil and China, design and build various diesel engine filtering products, as well as light-duty filtration products for smaller gas engines.

Cummins Filtration manufactures air filtration systems, crankcase cooling systems, exhaust systems, and numerous other products for automotive and other vehicle engines.

The buyer is Industrial Opportunity Buyers LLC, a Chicago-based private-equity concern.

Hasnain Merchant, Cummins general manager of the light-duty filtration business, will be the CEO of the new organization. It will be named Kuss Filtration and headquartered in Findlay.

"This is a very exciting opportunity for the Light Duty Filtration business to be able to work with IOP, who will be dedicated to invest and grow the business," according to Merchant. "IOP will work with the current management team to help drive operational improvements, implement lean manufacturing initiatives, accelerate cost structure improvements and pursue growth opportunities."

More stringent global emission standards represent a growth opportunity for Cummins’ filtration business, the company said, and it added that selling the light-duty filtration operations will allow the remaining organization to devote more resources to manufacturing products that are a critical part of its growth strategy.

"Selling this part of our light duty filtration operations to a strong buyer like Industrial Opportunity Partners provides Kuss and the business in Bloomer with the opportunity to grow while allowing us to concentrate on markets that are core to Cummins long-range growth plans," stated Cummins Filtration president Joseph Saoud.

 

Montreal’s Noveko Secures $6 million to Expand Filtration and Medical Markets

Montreal’s Noveko International Inc. has wrapped up a new $6-million financing and says sales gains in the air filtration and medical fields "give us confidence we can keep up the momentum through fiscal 2012."

For the year ended June 30, the filtration technology specialist reduced its loss from continuing operations to $15.8 million from a loss of $24.2 million a year earlier. Revenue was $14.3 million vs. $15.1 million. The lower loss was attributed to tighter control of operating costs.

"New orders and partnerships for marketing our face masks and hand sanitizers to industry and medical institutions buyers point to a recovery in these two key segments," CEO André Leroux said.

The financing comprised the issue of $4 million of convertible debentures and $2 million of cash. The money will be devoted to expanding the filtration and medical markets

 

NEW PRODUCTS

K-C Gets FDA Clearance for Child's Face Mask

Kimberly-Clark Health Care (KCHC) announced that it has received 510(k) clearance from the Food and Drug Administration (FDA) to market the Kimberly-Clark Child's Face Mask. This marks the first time that the FDA has granted any manufacturer 510(k) clearance for a pediatric face mask and establishes the product with the designation of a Class II medical device.

The decision by KCHC to undertake the 510(k) regulatory submission pathway for the Child's Face Mask was in response to a call for action from the Society for Healthcare Epidemiology of America (SHEA), the Association for Professionals in Infection Control and Epidemiology (APIC) and the Association of PeriOperative Registered Nurses (AORN). Those organizations and the FDA were important contributors in defining key considerations that shaped product design and recommended ages for use. KCHC worked with the FDA to develop standardized clinical measurements that are specific to the unique circumstances of pediatric mask use and performance in healthcare settings.

The Kimberly-Clark Child's Face Mask is a single-use device that is intended to be worn by children ages 5-12 to provide protection for the respiratory tract, and has been specifically designed to fit small faces to maximize effectiveness, comfort and compliance. Featuring colorful Disney characters on its outer-facing panel to create familiarity and appeal, the mask is intended for use in healthcare settings such as waiting areas and exam rooms to protect children who may be at increased risk for infection. These include children who are already ill, immuno-compromised, displaying flu-like symptoms, potentially contagious while visiting a patient family member, or having a routine check-up during flu season or a pandemic outbreak.

The FDA says performance tests reviewed by the agency showed that air flow and filtering ability of the mask were appropriate for children. The mask includes specific fitting instructions for the adult who assists the child in using the device.

 

Donaldson’s New 3-in-1 Compressed Air Filter—High Efficiency, Reduced Install Space

Donaldson Company (NYSE:DCI), introduces the Donaldson DF-Three filter element for point of use filtration of compressed air in a wide variety of applications. The DF-Three filter features three stages of purification in one element: 1) aerosol coalescing, 2) hydrocarbon vapor adsorption, and 3) particulate removal. This new product is validated according to ISO 12500-1 and achieves an overall residual oil content of < 0.003 mg/m³. As a result, it achieves Class 1 compressed air quality according to ISO8573-1:2010.

The DF-Three filter expands upon the flow-optimized filter housings of the Donaldson Ultrafilter® brand DF series. By combining the 3 stages of filtration, the DF-Three requires up to 60% less installation space and results in more cost-effective implementation and maintenance.

The DF-Three filter is particularly well-suited for point of use filtration in the food and beverage and pharmaceutical industries and in laser cutting machines and paint applications. The filter can also be effectively used as a compact treatment unit for small compressors to generate pure compressed air in a cost-effective manner.

 

Oreck Launches DualMax™ Dual-fan Air Purifier

Oreck Corporation has brought a new air cleaner to the market, one that has the power to move and clean more air than ever before.

The Oreck DualMax™ Air Purifier features two fans, and on the highest setting, it produces double the airflow and twice the power as Oreck’s leading air purifier. Recommended for medium sized rooms up to 200 square feet, the Oreck DualMax™ has a CADR (clean air delivery rate) of 130 when used on its high setting and is recommended for use in a 10’ x 20’ room with an 8’ ceiling. (Based on ANSI/AHAM AC-1, the Association of Home Appliance Manufacturers’, certification program for room air cleaners.)

The new air purifier features Oreck’s patented Truman Cell® filtration system, which captures pet dander, cigarette smoke, pollen, dust, and other allergens from the air that passes through the filter, pulling them out of the air like a magnet. The DualMax™ Air Purifier also features a high-efficiency odor absorber which reduces common household odors as well as chemical fumes such as paint smells, the gases put off from new rugs and furniture, aerosol vapors and cleaning supply odors from the air that passes through its filter. Both the Truman Cell® and the Helios Shield® odor absorber filters are permanent and never need replacing.

"You have to move the air to clean the air. The DualMax™ Air Purifier, with double the airflow and twice the power, is designed to move and clean more air than ever before," says Oreck’s Chief Marketing Officer, Scott Vogel.

The DualMax™ Air Purifier is ENERGY STAR® certified and has three speed settings; the lowest setting is only 37 decibels — a noise level considered to be between a whisper and the hum of a refrigerator. The company’s website sells the unit for $399.99 with free shipping.

 

Franklin New Adhesives Offer Strength, Speed and Convenience

Franklin Adhesives & Polymers, a division of Franklin International, has introduced a new line of FilterFAB adhesives, which the company says will make the fabrication of durable filters easier and quicker.

The FilterFAB line from Franklin Adhesives & Polymers has been launched with three adhesives that meet many bonding applications in the assembly of air and liquid filters. The line includes two water-based Polyvinyl Acetate (PVA) adhesives for assembly and a polyurethane filtration adhesive that can handle end cap potting and edge/frame sealing.

Franklin Adhesives & Polymers claims that rigorous in-house testing indicates that both of the two PVA adhesives – FilterFAB 200 and FilterFAB 300 – offer stronger bond strength than other filter fabrication adhesives. Both of these PVA products provide the convenience of one-part formulation and the easy clean-up inherent in water-based adhesives. Compatibility with most glue spreader systems makes it all the easier to use either of these FilterFAB products, says Franklin Adhesives & Polymers.

Developed for cost-effectiveness and speed, FilterFAB 200 offers a set time of less than 30 seconds – making it one of the fastest-setting adhesives available for filter assembly. Additionally, it can be applied in temperatures as low as 2°C (35°F).

FilterFAB 300 is a high-performance PVA ethylene copolymer emulsion adhesive with very strong green and tensile strength. It sets almost immediately with some repositionability. In many cases, this adhesive eliminates the need for clamping.

FilterFAB 2000 is a two-component solvent-free polyurethane assembly adhesive for assembling air, water and oil filters. It is particularly suitable for potting filter end caps and bonding side seams. This adhesive bonds well to metals, PVC, vinyl, fiberglass and cellulosic materials and offers good chemical resistance as well as good heat resistance with temperatures below 77°C (170°F). Room-temperature cure time of three to five minutes can be heat accelerated, and it reaches handling strength in less than ten minutes. FilterFAB adhesive offers Shore D Hardness of 80 to 82 (when fully cured) and meets FDA regulation CFR 175.105 for indirect food contact. It is also available in two colors, beige and white.

 

 

McIlvaine Company

Northfield, IL 60093-2743

Tel:  847-784-0012    Fax:  847-784-0061

E-mail:  editor@mcilvainecompany.com

Web site:  www.mcilvainecompany.com