CONSTRUCTION

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COMPANY NEWS

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.

The 55+ housing market saw gradual but steady improvement throughout 2011, says the National Association of Home Builders (NAHB), and this trend is expected to continue in 2012 as more baby boomers turn 55 and seek new homes and communities.

"NAHB is projecting that the number of housing starts in 55+ communities will increase 18% to 53,200 units in 2012, and another 25%, to 66,600 in 2013," said Paul Emrath, NAHB’s vice president of survey and housing policy research, at the NAHB International Builders’ Show.

Housing starts for January rose 1.5% to a seasonally adjusted annual rate of 699,000, according to an estimate from the Census Bureau and the Department of Housing and Urban Development.

Single-family housing starts fell 1% in January to a rate of 508,000. Meanwhile, starts in buildings with at least five units rose 14.4% to a rate of 175,000, continuing the surge in creation of apartment buildings.

Building permits in January were 0.7 percent above the revised December rate and 19.0 percent above the January 2011 permit estimate. Of this, single-family authorizations in January 2012 were at a rate of 445,000; this is 0.9 percent above the revised December figure of 441,000. Authorizations of units in buildings with five units or more were at a rate of 208,000 in January.

For Sandler, 2011 was another very successful year. The company achieved a 37-million year-on-year increase in turnover, reaching a total of 240 million Euros. This represents a continuation of the positive development over the past five years, during which the turnover of previously 112 million Euros was more than doubled.

In the past five years, the workforce increased from 460 to 550 employees.

Investments, mostly in manufacturing lines, were the main driver of this development, as was the opening up of new markets and fields of application. During the past five years, the nonwovens producer invested more than 60 million Euros. Early last year, a new nonwovens production line was commissioned in the newly built "plant 4". Sandler AG runs the largest nonwovens manufacturing location in Europe. Based on the 2010 sales figures, Sandler AG now ranks 10th among the world’s largest nonwovens producers. The company supplies a very wide range of different nonwoven materials, utilised in diverse applications in the hygiene, wipes, automotive, filtration, engineering, and home textiles markets. Each of these market segments also saw a rise in turnover during the past year.

Sandler AG is planning further investments in new, innovative production lines, information and communications technology as well as the development of new markets in the years to come. With an export ratio of 60 percent the company already supplies high-quality nonwovens to buyers around the globe and is currently opening up the Indian market. Owing to the Bavarian-Indian Centre for Business and University Cooperation at the University Hof Sandler was able to quickly forge the necessary contacts.

Porvair plc ("Porvair"), the specialist filtration and environmental technology group, recently announced its results for the year ended 30 November 2011.

• Revenues up 7% to £68.1m (2010: £63.6m)
• Profit before tax up 44% to £4.5m (2010: £3.1m).
• Cash generated from operations was £8.1m (2010: £8.1m).
• Net debt reduced by 47% to £5.1m (2010: £9.7m; 2009: £13.9m).
• Net debt to EBITDA ratio was 0.6 times (2010: 1.6 times).

Microfiltration division:

• Revenues up 4%. Strong performance in aviation and energy markets.
• Several large contract wins, record order intake.
• Finished year with record opening order book for 2012.

Metals Filtration division:

• Revenues up 15% in constant currency (12% as reported).
• Margin enhancement and market share gains from patented products continues.
• Further transfer of un-patented products to China on track.

2012 has started well:

• $25m contract won to supply filters onto the Boeing 787 over the next 15 years.
• Acquisition of the Block Digester product line from Aim Laboratories expected to be immediately earnings enhancing.

Commenting on the results and outlook, Ben Stocks, Chief Executive, said, "2011 was a good year with progress towards strategic objectives achieved across the business. Porvair’s strategy and operating objectives have remained consistent for several years.  Since 2007, Porvair has achieved 50% revenue growth (11% CAGR); generated over £30m in cash from operations; and this year posted a 21% operating profit return on capital.

"2012 has started well, with revenues in December and January ahead of the prior year.  Order books are at record levels, boosted by the large POSCO order that is expected to be mostly delivered early in 2013. Leaving this order aside, underlying demand is also currently healthy. Porvair holds attractive niche positions in growing markets and has a clear strategy for growth. Provided the macro economic situation remains stable, the Board sees plenty of opportunity for 2012 and beyond".

• 2Q Net sales up 8% versus Year-Ago Quarter
• Gross Margin of 24.0% up from 21.2% in Year Ago Quarter
• Announced Closure of Cotton Linter Pulp Production Line in Americana, Brazil
• Announced Sale of Non-Core King, N.C. Converting Business

Buckeye Technologies Inc. (NYSE:BKI) recently announced second quarter adjusted net income of $27.9 million, which excludes after-tax non-cash asset impairment charges of $29.7 million related to the announced closure of the cotton linter pulp production line in Brazil and sale of our converting business in North Carolina, and income tax expense of $3.6 million related to cellulosic biofuel credits. Adjusted net income rose 37% as compared to the prior year period’s $20.3 million which excluded after tax costs of $3.2 million from early extinguishment of debt, restructuring and accrued interest related to cellulosic biofuel credits.

Net sales of $227 million were up 8% versus last year’s second quarter sales of $210 million. Sales benefited from higher selling prices and increased specialty wood fibers shipment volume.

Chairman and Chief Executive Officer John B. Crowe said, "We were pleased with our second quarter fiscal 2012 financial results, which exceeded the expectations we shared during our last earnings call in October. The key drivers of year over year improvements continue to be strong markets and selling prices, better capacity utilization at our Memphis specialty cotton fibers plant, and benefits from our cost improvement initiatives.

"We continue to focus on generating free cash flow and returns on investment above our cost of capital which we did again in the quarter. One aspect of this focus is our restructuring efforts. In January, we announced the closure of our cotton linter pulp production line in Brazil and continued discussions with multiple parties for the potential sale of this facility. Also in January, we announced the sale of our non-core Merfin Systems converting business in North Carolina. These moves will allow us to redirect cash and management focus from under-performing or non-core businesses into strategic investment and growth opportunities. Key examples of that are our Foley energy project, which we expect to complete in the third quarter of fiscal year 2012, and the Foley specialty wood pulp expansion project, which is on track for completion at the end of calendar year 2012. Overall our business has good momentum."

State and local officials joined executives of Donaldson Company (NYSE:DCI) recently to cut the ribbon on a new manufacturing plant in Aguascalientes, Mexico. The new plant is located near Donaldson’s existing plant, which is the headquarters for its Latin American and Caribbean regions.

The new 150,000 square foot, state-of-the-art facility is fully operational, and significantly expands Donaldson’s capabilities for producing air filtration products including PowerCore®, RadialSeal™ and Axial Seal air cleaners and ancillary products. Additionally, the Company will utilize its existing plant to increase liquid filtration manufacturing for products such as those designed with Donaldson’s patented Synteq™ and Synteq XP™ media for fuel, lube and hydraulics applications.

"The demand for air filtration products to support our OEM and aftermarket customers in Latin America has increased to the stage where more direct access to products is required," said Guillermo Briseño, managing director for Donaldson Latin America. "Expanding our air filtration manufacturing capabilities in Aguascalientes aligns with our strategy of locating facilities close to customers. This ensures the highest level of customer service as we manufacture and ship our filtration products in the most efficient and cost-effective manner possible."

"As we relocate our existing air filtration manufacturing capacity into the new plant, our existing facility is being reconfigured to double our liquid manufacturing capability in Mexico," continued Briseño. "Similar to the need for air filtration products, our Latin American OEM partners are also experiencing increased demand for liquid filtration products for diesel-powered engines and hydraulic equipment. Manufacturing crucial liquid filtration products within the region, such as those designed with our Synteq and Synteq XP media, will allow our customers the flexibility to source products to meet a wide range of filtration efficiency and capacity requirements."

The new Aguascalientes plant, which employs 260 people, is pursuing LEED (Leadership in Energy and Environmental Design) certification – an internationally recognized mark of excellence. LEED provides a framework for identifying and implementing practical and measurable green building design, construction, operations and maintenance solutions.

"Donaldson strives to be a good corporate citizen – particularly in the regions where we operate facilities," shared Joe Lehman, Donaldson’s Vice President of Global Operations. "In addition to being LEED certified, the new facility is pursuing ISO certifications for environmental and quality standards."

In addition to the two manufacturing facilities, Donaldson also operates a distribution center in Aguascalientes, and has other sales, manufacturing and distribution sites in Monterrey, Mexico; Sao Paulo, Brazil; and Santiago, Chile.

National Nonwovens announces the installation of a 2.4 meter air-laid needlepunch nonwoven line strategically located in a contained, clean-room environment. Production on the line is currently focused on, but is not limited to, the manufacturing of medical products. It is fully equipped with state-of-the-art electronics to effectively control temperature, humidity, dusting, and contamination; which are necessary for advanced wound care, medical devices, and patient-care products.

The air-laid line has the support of process engineers and quality control, including complete chemical profiling of all materials. It is capable of processing synthetic and various natural fibers. Products can be produced in the range 1.5 oz/yd(2) to 10 oz/yd(2), supported or unsupported. The line has in-line slitting with slit widths up to 90 inches with future expansion including the installation of a three-roll press with laminating capabilities.

This 2.4 meter air-laid line is in addition to National Nonwovens' existing air-laid lines and increases capacity in excess of 2 million pounds of fiber per year. When combined with National Nonwovens' other production lines, total processing capacity is in excess of 15 million pounds per year. The company's manufacturing and technical capabilities include both air-laid and carded cross-laid web forming with chemical bond, felted wool, needlepunch, lamination, and thermo-bond constructions. National Nonwovens will continue to expand its breath of technology as a commitment to customers' present and future requirements to meet the needs of global markets.

Based in Easthampton, Massachusetts, National Nonwovens manufactures of needlepunched nonwovens and superior quality felt for a number of markets such as Aerospace, Ballistics, Craft, Home Furnishings, Filtration, and Medical.

Atlas Copco (China) Investment Co Ltd has bought China’s Wuxi Shengda Air/Gas Purity Equipment Co Ltd.

Based in Wuxi, near Shanghai, Wuxi Shengda manufactures compressed air and gas drying and filtration equipment. The company is privately owned with 130 employees and annual revenues of CNY95 million, and has been active in the air treatment industry since 1996.

"This acquisition is in line with Atlas Copco’s strategy to offer complete solutions to our customers," explained Stephan Kuhn, Business Area President of Atlas Copco Compressor Technique. "It provides us with a wider and more complete range of air and gas treatment equipment, and increases our production, sales and service presence in China."

The company, which will become part of Atlas Copco Compressor Technique’s Quality Air division, will continue to operate under the Shengda brand.

Web site:  www.mcilvainecompany.com