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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.

Polluted air on the mainland has pushed up demand for air-purifiers, with international makers of the products seeing surging sales. TechSci Research forecast that China's air-purifier market would surpass US$14.6 billion by 2016, with a compound annual growth rate of 36 percent.

Beijing's air quality reached a record low in January, but it was still only the ninth most polluted city on the mainland. Global air-purifier makers are seeing the bright side of the hazy conditions as concerns over air quality drive up demand.

Blueair, a Sweden-based maker of air-purifiers whose products are sold in more than 50 countries, said its sales in mainland China soared 300 per cent year on year in the three months from last December to 20,000 units.

High levels of air pollution have raised the awareness of Chinese people about indoor air quality, said Sam Li, general manager of Blueair China. "The smoggy weather conditions have helped accelerate sales of our premium air cleaners," he said, noting that all the products in the Blueair range saw record sales in China over the past two months. Blueair's 500 and 600 series, which are for rooms of up to 65 square metres are the most popular on the mainland at a cost between 6,860 yuan and 12,000 yuan (US $1000 - $1900). Blueair has stepped up efforts to expand its presence with a joint venture in Shanghai set up last September to increase investment in its mainland operations.

A report by global research and consulting company TechSci Research forecast that China's air-purifier market would surpass US $14.6 billion by 2016, with a compound annual growth rate of 36 per cent, outpacing the global average of 8 per cent growth.

Philips, the largest air-purifier maker in China with a market share of more than 40 per cent, sees increasing demand from the rapidly expanding middle class. Philips' air-purifier products on the mainland are priced between 1,000 yuan and 6,000 yuan, targeting a wider range of consumers. The Netherlands-based appliance maker's China sales went up by 29 per cent to €2.71 billion (HK$27.36 billion) last year from a year ago, outpacing the 9.8 per cent growth rate of its total sales, according to Philips' annual results, making China their second largest market. To capitalize on the rising demand, the company will accelerate expansion into the air-purifier market in second- and third-tier mainland cities and invest in product innovation.

China's air problems has also given rise to face mask sales, and diverse products such as mobile air purifier helmets, which is essentially a helmet attached to a portable air filtration system carried on the waist. Shown off at the recent East China Fair, the anti-smog helmet is powered by a lithium battery that lasts for eight hours.

Nonwovens Industry reports that Southeast Asia, or the region known as the Pacific Rim, has recently emerged as a prime area of investment for the nonwovens industry. Driven by hygiene product demand both in China and Japan as well as in the Pacific Rim region, these investments are slowly creating a powerful nonwovens industry in the area.

Beyond hygiene, demands for clean drinking water as well as growth in the automotive industry are driving growth in the filtration market. Here suppliers are challenged with matching the same level of quality in more developed regions at the lower price point. "Supplying local production with lower costs and reliable quality speedily is the real needs of customers in this area," says Saori Shairator, marketing manager of Japanese meltblown manufacturer Tapyrus.

New expansions currently are targeting hygiene manufacturers both in China and in the Pacific Rim nation. Thailand and other Pacific Rim countries like Indonesia, Malaysia and Vietnam, are seeing growth in hygiene products driven by increases in the gross domestic product (GDP) as consumers gain more disposable income for items like disposable diapers and/or feminine hygiene pads.

And, while the local market has not fully developed, the few local producers in this region face competition from products imported from China, Korea, Taiwan, Japan and even Europe. "Competition is very severe and it could be said that this area is supplied from markets all over the world," says Shairator.

Just last month, CNC International announced it would add a 24,000-ton Reicofil 4 line in Thailand, adding to its current capacity of 15,000 tons by the end of the year. The line is to be located in a new production site near CNC’s existing operation in the Rayong province of Thailand.

According to Chompoonut Kaewwiriyakijkul, spokesperson for CNC, Thailand has emerged as a center of logistics within the region, due largely to its ability to shop, via Dawai port, to many countries in Southeast Asia, the Middle East, North Africa and even Europe.

"In addition, Thailand has and will have a stable or even higher GDP due to both farming, tourism and automotive investment in the area," Kaewwiriyakijkul says. "We are also much closer to the well-known sources of polypropylene resins, from which the majority of spunlaid materials are made from."

Nonwovens producers like Denmark’s Fibertex and Korea’s Toray Advanced Materials both have ambitious expansion plans in the works as hygiene manufacturers from around the world build new plants in the region. At the forefront of this investment is consumer goods giant Procter & Gamble, which announced last August it would spend $100 million on a new diaper plant in Indonesia.

"Indonesia with its population of more than 220 million must be considered to be the next booming country in the areas of nonwoven and disposable hygiene products," says Johan Berlin, managing director of Sweden-based machinery broker Investkonsult. "This will be driven not only by its own population but also to compete on export markets for the neighboring countries such as Thailand, Vietnam, Philippines and even Australia."

According to Berlin, while Indonesia already has a number of roll goods manufacturers, the current levels of production reportedly do not meet the demand in markets like hygiene, automotives, construction, hygiene and wipes. This is slowly changing as more nonwovens producers eye this country for their next growth opportunity.

Leading the way here is Korean nonwovens maker Toray Advanced Materials. After establishing large-scale nonwovens production sites in Korea and later China, the company announced last year it would set up a subsidiary in Jakarta, Indonesia, known as Toray Polytech Jakarta, in an effort to capitalize on growth in the ASEAN region.

The new site’s first line, a five-beam polypropylene-based spunbond line is expected to be complete in June 2013, manufacturing 20,000 tons of nonwovens per year and significantly broadening TAK’s footprint in Asia. "Once we finish this expansion, TAK can cover all of the Asian countries more promptly and safely from our three production sites in East Asia, China and South Asia," says Evan Lee, deputy general manager of the fiber marketing team.

As it waits for its two large lines to come onstream adding a total of 40,000 tons of capacity in China and Indonesia, TAK has not made any other significant expansion announcements. However, Lee did say that the company will continue to invest at its sites in China and Indonesia until 2020 and investment in other emerging markets is definitely being examined. For now, success in China and ASEAN will be a top priority.

While Toray targets Indonesia, Fibertex Personal Care continues to build on the success of its Malaysian operation. In April, the Danish company said it would invest $55 million in a state-of-the-art production line in Malaysia. The new line will be the third for the subsidiary, which Fibertex founded in 2002. Expected to be operational by the end of next year, line number three will increase production capacity by 30% to 70,000 tons.

The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced new residential construction statistics for February 2013.

Privately-owned housing starts in February were at a seasonally adjusted annual rate of 917,000., 0.8 percent above the revised January estimate of 910,000 and is 27.7 percent above the February 2012 rate of 718,000. Of this, single-family housing starts were at a rate of 618,000; this is 0.5 percent above the revised January figure of 615,000. Construction of single-family homes in the U.S. rose to a nearly five-year high in February

The February rate for units in buildings with five units or more was 285,000.

Building permit authorizations in February, an indication of future construction, rose 4.6 percent to 946,000 from the revised January rate of 904,000 and is 33.8 percent above the February 2012 estimate of 707,000. Single-family authorizations in February were at a rate of 600,000; this is 2.7 percent above the revised January figure of 584,000. Authorizations of units in buildings with five units or more were at a rate of 316,000 in February.

The Commerce data showed new home building was mixed in the four U.S. regions last month. Construction on new homes rose 37.5% in the Midwest and 18.4% in the Northeast but dropped 7.2% in the West and 5.7% in the South.

Ahlstrom states in its 2012 annual report that net sales decreased by 1.5% to EUR 1,010.8 million, compared with EUR 1,025.8 million in the comparison period. The decline was mainly due to lower sales volumes and capacity closures. Higher selling prices and a favorable currency effect from the appreciation of the U.S. dollar against the euro had a positive impact on net sales.

Operating profit excluding nonrecurring items was EUR 17.9 million (EUR 29.6 million). The decrease was due to lower sales volumes, adverse product mix and increased market related downtime in production. Increased energy costs stemming from higher natural gas prices in Italy and Brazil also had a negative impact on operating profit. Higher selling prices and the profit improvement program implemented at the end of 2011 improved profitability. In addition, short term cost mitigation, related to maintenance and temporary lay-offs, had a positive effect on profitability

The operating environment remained challenging as overall demand was soft with increasing volatility. Geographically, demand in Europe remained weak, while demand in North America slowed towards the end of the year following earlier gains. Some signs of recovery in the Asian market, and particularly in China, were seen.

In 2012, the Filtration business recorded sales of EUR 352.7 million, compared to EUR 324.5 million in 2011.

The Filtration business area is divided into two segments: Transportation Filtration and Advanced Filtration. The EUR 20 million acquisition of Munktell Filter AB in October expanded the life science area in the advanced filtration business, paving the way for Ahlstrom to become a global leader in life science and laboratory media filtration.

The market for transportation filtration materials in North America weakened in the fourth quarter following earlier gains. The demand for transportation filtration materials in Europe remained soft throughout the year. The advanced filtration material markets served by Ahlstrom, particularly gas turbine, laboratory and life science filtration, continued to strengthen.

Donaldson Company, Inc. (NYSE: DCI) announced its financial results for its fiscal 2013 second quarter. Summarized financial results are as follows (dollars in millions except per share data):

(*) The prior year EPS amounts reflect the impact of last year's two-for-one stock split.

"Our diversified portfolio of global filtration businesses delivered a new sales record in our second quarter," said Bill Cook, Donaldson's CEO. "Our Gas Turbine Products' sales increased 79 percent as we shipped a number of large project shipments to our Customers this quarter. This offset weaker sales into the North American On-Road truck market, the On-Road and Off-Road equipment markets in Asia, and for On-Road and Off-Road replacement filters in Europe. We did see improved demand for replacement filters in the Americas and in Asia, with our local currency sales increasing 4 and 6 percent, respectively."

"Despite our higher sales, our operating margin decreased 100 basis points from last year to 11.9 percent due to lower fixed cost absorption in our Engine Products segment and the mix shift to large Gas Turbine project shipments. This was partially offset by savings from our ongoing Continuous Improvement initiatives. We continued to take actions to better align our manufacturing and operating expenses with our forecasted Customer demand. However, we are also continuing the engineering work on many new OEM Customer programs that will be going into production in the next 24 months. In addition, we continue to work on our global Strategic Business Systems project. We have chosen to continue these investments to support our Strategic Growth Goals."

"Based on input from key Customers, we see current market conditions continuing in the near term due primarily to the ongoing high levels of global economic uncertainty. Fortunately, we anticipate strength in our Gas Turbine business for the balance of our fiscal year, which will help offset some of the weakness in our other businesses. As a result, we are forecasting our Company's full-year sales to be approximately equal to last year's record $2.5 billion, and our FY13 EPS forecast is between $1.61 and $1.81 per share."

Financial Statement Discussion

The impact of foreign currency translation decreased sales by $1.7 million, or 0.3 percent, during the quarter and decreased sales by $18.6 million, or 1.6 percent, year-to-date, compared to the same periods last year. The impact of foreign currency translation increased reported net earnings by $0.2 million, or 0.3 percent, during the quarter and decreased reported net earnings by $1.2 million, or 1.0 percent, for the year.

Gross margin was 33.4 percent for the quarter and 33.5 percent year-to-date, compared to prior year margins of 34.6 percent and 35.0 percent, respectively. The year-over-year decrease is primarily attributable to lower fixed cost absorption due to the decrease in our production volumes and the mix impact due to large Gas Turbine project shipments. Restructuring expenses included in gross margin were $0.5 million in the quarter and $0.7 million year-to-date. The lower fixed cost absorption and restructuring expenses were partially offset by the benefits from our ongoing Continuous Improvement initiatives.

Operating expenses for the quarter were $127.8 million, up 1.4 percent from last year's $126.0 million. As a percent of sales, operating expenses were 21.4 percent, compared to last year's 21.7 percent. Operating expenses year-to-date were $252.5 million, or 21.3 percent of sales, compared to $250.7 million, or 21.1 percent of sales, last year. Restructuring expenses included in operating expenses were $0.9 million in the quarter and $1.0 million year-to-date. Our cost containment actions helped offset the restructuring expenses, higher pension expenses, and incremental expenses related to our Strategic Business Systems project.

Our effective tax rate for the quarter was 28.3 percent, compared to a prior year rate of 29.6 percent. The decrease was primarily due to $0.8 million in tax benefits from the retroactive reinstatement of the Research and Experimentation Credit in the U.S. The year-to-date effective tax rate was 28.9 percent, compared to a prior year rate of 27.3 percent.

As part of our ongoing share repurchase program we repurchased 320,000 shares, or 0.2 percent of our diluted outstanding shares, for $10.2 million during the quarter. Year-to-date we have repurchased 1,820,000 shares, or 1.2 percent of our diluted outstanding shares, for $61.0 million.

FY13 Outlook

• We are projecting our full-year sales to be approximately equal to last year's record $2.5 billion. Our forecast is based on the Euro at US$1.34 and 94 Yen to the US$.
• Our full-year operating margin forecast is 13.9 to 14.7 percent.
• Our FY13 tax rate is anticipated to be between 28 and 30 percent.
• We forecast our FY13 EPS to be between $1.61 and $1.81.
• Cash generated by operating activities is projected to be between $240 and $270 million. Our capital spending is estimated to be between $90 and $100 million.

Engine Products: We forecast FY13 sales to decrease slightly compared to FY12, including the impact of foreign currency.

Our On-Road OEM Customers are planning to build fewer heavy- and medium-duty trucks. Demand from our Off-Road OEM Customers is anticipated to be mixed: build rates of agriculture equipment are forecasted to remain good, build rates of construction equipment are expected to slowly improve in North America but remain weak in Europe and China, and build rates of mining equipment are expected to decrease globally.

We are anticipating slowly improving growth for Aftermarket Products. Current utilization rates for off-road equipment and on-road heavy trucks began stabilizing late in the second quarter and inventory levels at dealers and distributors are consistent with current utilization. We should benefit from our continued expansion into emerging economies, from the increasing number of systems installed in the field with our proprietary filters, and from our increasing sales of liquid filtration products.

We forecast our Aerospace and Defense Products' sales to be slightly lower than last year as the continued slowdown in military activity is expected to be partially offset by growth from commercial aerospace sales.

Industrial Products: We forecast sales to increase 1 to 6 percent over FY12, including the impact of foreign currency.

Our Industrial Filtration Solutions Products' sales are projected to decrease slightly compared to last year. We assume manufacturing activity will increase moderately in the Americas, slowly improve in Asia, and continue to be weak in Europe.

We anticipate our Gas Turbine Products' sales to be up 27 to 32 percent due to continued strength in both the large turbine power generation and the oil and gas markets.

Special Applications Products' sales are now forecast to be down 1 to 6 percent with expected weaker end market demand for disk drive filters partially offset by growth from membranes products and integrated venting products.

Commenting on the results, Malcolm Coster, Chairman, said:

"Fiberweb delivered strong growth in sales, profit and earnings in 2012, maximising the opportunity in recovering North American markets and dealing effectively with demanding conditions in Europe.  This success, together with the comprehensive balance sheet review undertaken during the year, has allowed the Board to recommend an increase in the dividend as well as to accelerate major investments.  We have demonstrated clear progress towards meeting our stated medium-term objectives and expect our investments in people, assets and technology to fuel further progress in the year to come."

Highlights

• Like-for-like⁽²⁾ revenue up 5.8% to £300.1 million (2011: £283.7 million): strong recovery in US construction offset by weakness in European construction
• Like-for-like⁽³⁾ Group underlying⁽¹⁾ operating profit up 18.1% to £15.0 million (2011: £12.7 million), with underlying operating margins up 50 basis points to 5.0% (2011: 4.5%)
• Group underlying⁽¹⁾  EBITDA up 20.3% to £27.8 million (2011: £23.1 million)
• Profit before tax of £6.5 million (2011: loss before tax of £7.2 million)
• Underlying⁽¹⁾ earnings per share up 53% to 5.2p (2011: 3.4p after normalised⁽⁶⁾ interest costs of £2.0 million; reported loss per share 0.8p)
• ROCE⁽⁵⁾ up 360 basis points to 9.2% (2011: 5.6%)
• Net cash of £14.5 million (2011: £22.0 million) after £13.7 million costs relating to the 2011 hygiene disposal, strong working capital performance and a one-off pension contribution of £15.5 million
• Board recommending a 10% increase in the final dividend to 2.2p

(1) Underlying profit measures are stated before restructuring charges, amortisation of acquired intangibles and other non-recurring items, as set out in the Consolidated Income Statement.

(2) Like-for-like sales at constant currency of £283.7 million for the year ended 31 December 2011 are adjusted to reflect a full year of sales from the Tubex tree shelter business acquired in May 2011 and the deconsolidation of the Coronor medical fabrics business as a result of the disposal of the hygiene businesses in December 2011.

(3) Like-for-like operating profit at constant currency of £12.7 million for the year ended 31 December 2011 is adjusted to reflect a full year of operating profit from the Tubex tree shelter business acquired in May 2011.

(4) EBITDA is underlying operating profit before depreciation and amortisation.

(5) ROCE is defined as underlying operating profit from continuing operations/ total fixed assets and working capital.

(6) 2011 normalised to reflect gearing after the hygiene disposal.

Lydall, Inc. (NYSE:LDL) recently announced financial results for the fourth quarter and year ended December 31, 2012.

• Net sales were $90.5 million, including unfavorable foreign currency translation of $1.3 million, or 1.4%, compared to $89.3 million

• Operating income of $2.0 million, or 2.2%, compared to $4.4 million, or 4.9%

• Net income of $2.4 million, compared to $2.7 million

• Net sales were $378.9 million, compared to $383.6 million in 2011

• Gross margin of 20.5%, an improvement of 290 basis points from 2011, primarily from operational efficiency improvements in the Thermal/Acoustical Fibers segment

• Operating income of $21.4 million, or 5.6%, compared to $16.2 million, or 4.2% in 2011

• Income from continuing operations in 2012 was $16.8 million, compared to $9.1 million in 2011

• Net income of $16.8 million, compared to net income in 2011 of $13.8 million

Net sales of $90.5 million in Q4 2012 were $1.1 million greater than Q4 2011. Increased sales volume from the Thermal/Acoustical Fibers ("T/A Fibers") segment of $3.3 million and the Life Sciences Vital Fluids business ("VF business") of $0.8 million, included in Other Products and Services, were partially offset by lower net sales from the Performance Materials ("PM") and Thermal/Acoustical Metals ("T/A Metals") segments of $2.1 million and $0.7 million, respectively. Higher consumer demand in North America for vehicles on Lydall's existing platforms and new platform awards contributed to the increased net sales for the T/A Fibers segment. Lower net sales for the Performance Materials segment were primarily due to decreased volumes of Industrial Thermal Insulation products of $1.4 million, specifically with lower sales of electrical papers products, as the product line was sold to a customer in a prior year.

Dale Barnhart, President and Chief Executive Officer, stated, "Lydall reported mixed results for the fourth quarter of 2012. Our Thermal/Acoustical Fibers segment continued to benefit from strong consumer demand for vehicles in the U.S. and sustainable operating improvements. However, our Performance Materials segment was negatively impacted by lower demand and mix of products sold to our customers. Overall, I am pleased with 2012, as all segments and OPS generated operating income in a volatile global economic environment.

"Entering 2013, we remain cautiously optimistic despite the continued uncertainty in the macro-economic environment. Instability of the global economy, particularly in Europe and Asia, provides an element of risk and uncertainty in the Company's near term outlook for the Performance Materials and Thermal/Acoustical Metals segments. However, in the Performance Materials segment, we are beginning to see positive signs in certain markets for Industrial Thermal Insulation products in the U.S. and Industrial Filtration products in Asia. As always, we remain focused on increasing margins in all operations and are dedicated to improving operating efficiency through Lean Six Sigma programs."

Pall Corporation (NYSE:PLL) recently announced that DART Aerospace will shortly initiate flight testing on a next-generation "Fit and Forget" advanced engine air filtration system that has been collaboratively developed for AS350 and EC130 helicopter models with Arriel engines. The new AS350/EC130 Advanced Engine Air Filtration System will provide the highest level of helicopter engine protection to enhance safety, reliability, availability, and performance by reducing erosion and other contamination-related damage. Featuring Pall’s Centrisep® technology, the Fit and Forget system will be self-cleaning and virtually maintenance free, unlike other filtration systems qualified for this aircraft. At Heli-Expo 2013, the world's largest exhibition dedicated to the international helicopter community, the first system for AS350/EC130 aircraft will be showcased.

DART has developed a composite fairing for the new system and has shared its expertise in system integration, certification, sales, marketing, and customer support with Pall. As confirmation of the system’s airworthiness, DART aims to obtain a supplemental type certificate (STC) from the FAA by the end of 2013 and subsequent certifications from other regional authorities.

Pall’s latest Centrisep design improvements dramatically increase dust separation efficiency and significantly reduce the accumulation of fine particles inside the unit, thus reducing the potential for unscheduled removals. It protects the engine against rain, snow, salt spray and hot gas ingestion. In addition, this latest design will incorporate a secondary screen filter that prevents damage from foreign objects (FOD) even when the engine cover is open. The Centrisep unit is certified for inadvertent entry into icing conditions without the complication of heavy bypass doors. Missions can be launched and completed without filter bypass procedures or aborting the operation.

DART Aerospace is "Mission Ready." A privately held aerospace company, DART provides industry-leading design, manufacturing and market-certified solutions for the helicopter and aerospace industry.

Pall Corporation (NYSE:PLL) is a filtration, separation and purification leader providing solutions to meet the critical fluid management needs of customers across the broad spectrum of life sciences and industry.

FibeRio, the developer and manufacturer of Forcespinning® nanofibre production systems, has raised $13 million in capital from two global strategic investors.

The investors are SABIC Ventures B.V., Saudi Basic Industries Corporation’s corporate venture capital arm, and Aster Capital Partners, sponsored by Solvay, Schneider Electric, Alstom and the European investment fund. The funding will be used to accelerate the company’s commercial growth, introduce larger scale production systems to the market and execute on a growing pipeline of orders and global opportunities with industry leading customers.

FibeRio says that Forcespinning is a disruptive, platform technology which enables leading manufacturers to produce nanofibres on a commercial scale in a cost effective way using a wide range of polymers and an environmentally sensitive process. Forcespinning is the only fine fibre production system capable of both melt and solution spinning from lab scale to full industrial scale production. Unlike electrospinning, Forcespinning does not require materials to contain certain dielectric properties for processing which limits the materials that can be produced into fibre. Nanofibre applications are used in a variety of markets including filtration.

American Air Filter Co., Inc. d/b/a AAF International, manufacturer of AmericanAirFilter® and AAF® products, is proud to introduce the innovative MEGApleat™ M8 premium pleated filter. When compared to the leading MERV 8 pleated filter in the market today, the MEGApleat M8 filter reduces energy costs by up to 20%, lasts 30% longer, and is 40% stronger. The MEGApleat M8 filter’s patent-pending design is the ideal choice for sustainable building design and operation, standing up to the most challenging environments and applications.

MEGApleat M8 filters promote maximum dust holding capacity (DHC) and can last up to 6 months or longer in most operating environments. This reduces the need to change filters every 3 to 4 months, saving both labor and material costs and reducing waste. More importantly, the MEGApleat M8 filter pays for itself through the energy savings associated with lower operating resistance throughout the life of the filter. The MEGApleat M8 filter is rated MERV 8.

The patent-pending design of the MEGApleat M8 filter includes a heavy-duty, galvanized expanded metal support grid combined with high-strength wet beverage board. The optimized pattern of the grid minimizes blockage to airflow. The metal cross-sectional area is 40% larger than other wire-backed designs. The strength of the grid combined with the proprietary moisture-resistant glue formulation helps prevent blowouts and failures under the toughest environments, including high-moisture applications.

The MEGApleat M8 filter’s uniform media with controlled fiber size and blend minimizes performance variations, providing dependable and consistent operation over time. MEGApleat M8 filter has been tested by an independent, third-party laboratory, ensuring that no commercial bias is present. This is the only way to verify that your air filter is performing to specification.

Peter Kurto, COO AAF International, expressed his excitement regarding the product introduction, "The MEGApleat M8 filter is a direct result of listening to our customers and their desire for a product with improved performance that reduces energy consumption, lasts longer, and is stronger. Our dedication to new product development demonstrates our commitment to enhancing value through innovation as we reinvigorate our roots as the global leader in air filtration."

Web site:  www.mcilvainecompany.com