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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.

Single-family housing production increased for a third consecutive month and builders pulled more permits for both single- and multifamily construction in May, according to newly released figures from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The data, according to the National Association of Home Builders (NAHB), reveals that the seasonally adjusted annual rate of single-family housing starts rose 3.2 percent to 516,000 units, the best pace since December of 2011.

While overall housing starts posted a 4.8 percent decline to a seasonally adjusted annual rate of 708,000 units in May, all of the decrease was on the more volatile multifamily side. Single-family starts rose 3.2 percent to 516,000 units as multifamily starts declined 21.3 percent to 192,000 units.

Regionally, dips on the multifamily side drove down combined housing starts in all but the West, which increased 14.4-percent. The Northeast, Midwest and South posted declines in total housing starts of 20.3 percent, 13.3 percent and 6.1 percent, respectively.

However, strong growth in new permitting activity for both single-family and multifamily homes drove the combined permitting number for May up 7.9 percent to a seasonally adjusted annual rate of 780,000 units, the strongest pace since September of 2008. Single-family permits were up 4.0 percent to 494,000 units, while multifamily permits increased 15.3 percent to 286,000 units.

Three out of four regions were also up in combined permit activity in May. The Midwest, South and West posted gains of 6.1 percent, 11.1 percent and 10.5 percent, respectively, while the Northeast registered an 8.0 percent decline.

Unaudited First Quarter 2012 Highlights ($ millions, except percentages)

Clarcor Inc. (CLC) reported a 7 percent increase in first-quarter profit, as revenues grew at the engine/mobile filtration and industrial/environmental filtration segments. Net sales at Engine/Mobile Filtration segment increased 8 percent, driven mainly by higher heavy-duty engine filter sales. Sales grew 12 percent domestically and 3 percent outside the US despite a 15 percent decline in China.

Industrial/Environmental Filtration unit sales advanced 8 percent, driven mainly by higher natural gas vessel sales. Sales outside US dropped 4 percent due mainly to lower sales from Europe impacted by continuing issues with the eurozone economies.

Packaging segment sales dropped 29 percent, due mainly to lower confection packaging sales, smokeless tobacco packaging sales and lower sales in other markets.

Clarcor said net sales for the quarter grew 5 percent to $257.26 million from a year ago.

Looking forward to the full year 2012, the company lowered its total sales growth estimate to a range of 5.5 to 7.5 percent, from the prior range of 6.0 to 8.0 percent.

Charlotte, NC-based Polymer Group, Inc. (PGI) announced solid fourth quarter and year-end earnings results for 2011 despite a volatile raw materials cost environment, severe flooding at the company’s Colombia operation and new market dynamics that have led to softer volumes in the US.

Sequential improvements in 2011 led to $1.18 billion in net sales, compared to $1.106 billion in 2010, says Ronee Hagen, CEO of PGI, during an April 2 webcast. She also notes annual adjusted EBITDA of $141 million in 2011 as well as cash increases to $72.7 million.

According to a company press release, "The year-over-year [sales] increase was due primarily to additional volume in the company’s Nonwovens segments, with increases in Latin America, Asia and Europe offset somewhat from lower volumes in the U.S., and lower volumes in the Oriented Polymers segment. Net sales also benefitted from a higher price/mix in all Nonwovens segments and Oriented Polymers, primarily due to price increases resulting from the higher raw material costs. Foreign currency translation rates negatively impacted sales by approximately $2.9 million compared with the fourth quarter of 2010."

Raw material costs were $19 million higher in Q4 2011 compared to the prior year and $101 million higher in 2011, noted Hagen. Polypropylene costs moderated in Q4 2011 but have accelerated to date in Q1 2012, she adds.

Gross profit, including the impact of purchase accounting, was $186.5 million for 2011—representing a gross profit margin of 15.7%—compared with a gross profit of $209.9 million the prior year.

"Although moderating in the fourth quarter of 2011, raw material costs impacted profitability throughout 2011 and have risen to date in 2012," according to a company statement. "The positive impact of the company’s U.S. plant consolidation activities and operational improvements throughout its global base during the year were offset somewhat by the disruption to operations from the flood in Cali, Colombia."

Hagen calls the return of that Colombia facility to normal operating levels "a significant achievement," given the impact of flooding, although it is still running a bit under its peak.

As for other PGI facilities, Hagen points to benefits during the year from "plant consolidation and realignment initiatives, particularly in the US, as our manufacturing costs were $10 million less compared to 2010."

The company refined its focus on its core functions in 2011 with the sale of its Difco business, which was fully closed down by early fourth quarter. "We are taking additional steps to reposition resources and to refine our strategic focus on growth markets," says Hagen.

Growth investments the company had underway since late 2010 came online in the second half of 211, with ramp up achieved by the fourth quarter in both the Suzhou, China, and Waynesboro, VA, lines.

"With this new capacity nearly 80% of our nonwovens business is comprised of spunmelt capacity," Hagen says. While the company saw some contribution from the operations in the fourth quarter, the impact will be felt more fully in 2012.

Capabilities at the Waynesboro, VA, line include the company’s new Arium platform technology, which is expected to open new opportunities in healthcare, industrial, filtration and new emerging market applications.

Challenges for the future, however, include new competition in the nonwovens market. "We are managing through an environment that has seen new competitive capacity come online at the same time," Hagen says suggesting "the pace of ramp up may be slowed a bit."

With softer demand in the US hygiene market, the company’s new Arium technology supports a shift into non-hygiene and higher growth markets. As it moves forward, PGI will leverage market leadership in high-growth regions with additional focus on wipes, filtration and new healthcare markets.

Camfil Farr recorded another successful year of higher sales and earnings. Net sales amounted to SEK 4,851 M (aprrox. US $692 million), an increase of SEK 275 M, compared with 2010. Underlying operating profit, excluding restructuring costs and items affecting comparability, was SEK 493 M (US $68 million), an increase of SEK 15 M and corresponding to an operating margin of 10.2%.

2011 highlights include:

• Redemption of minority shareholding - The Camfil Farr Group once again became a 100 percent, family-owned business when the Parent Company, Camfil AB, redeemed all shares previously held by the private equity company Ratos during more than 10 years of close cooperation. Ratos became shareholder in the Camfil Farr Group in 2000 in connection with the acquisition of Farr in the U.S.
• New subsidiary in Dubai - At the end of 2011, Camfil Farr established a new Middle Eastern base and subsidiary in the Jebel Ali Free Trade Zone in Dubai.
• Expanding in India - Three years ago the Camfil Farr Group acquired a 76% share of Anfilco in India, forming Camfil Farr Air Filtration India Ltd as a joint venture with Anand International Pte Ltd. Over the years, Camfil Farr India has more than doubled its sales and quadrupled its profit. In 2011, the remaining shares (24%) were acquired, making Camfil Farr India a wholly owned subsidiary.
• Camfil Farr India also set up fabrication facilities in Trichy, 300 km south of Chennai. The facility has the potential to become a major fabrication hub for Power Systems, meeting the requirements of major global OEM customers for power equipment. The workshop, with a total area of approximately 32,000 square metres, houses two covered fabrication bays with various machinery, and exclusive blasting and painting booths to handle carbon and stainless steel fabrication.
• Expansion of North American sales organization - Camfil Farr Group acquired Exfil, a former distributor of Camfil Farr, to increase presence in the Michigan market. Camfil Farr also acquired Solution Air in Beauport, in the province of Quebec, Canada. The two acquisitions are expected to contribute approximately SEK 57 M to consolidated sales.
• Divestment of Railroad business - At year-end 2011, an agreement was reached to divest the Railroad business unit to Parker Hannafin Corporation during the first quarter of 2012. The Railroad business unit had sales of SEK 141 M in 2011, with operations primarily in Canada, India and Australia. The divestment is part of Camfil Farr’s strategic plan to focus exclusively on core air filtration business.

Donaldson Company, Inc. Bloomington, MN, will begin construction on two new manufacturing plants in Xuzhou, China, to serve the fast-growing filtration needs of China's diesel-powered equipment and industrial markets. Each of the new plants will be 140,000 square feet. One facility will be dedicated to manufacturing air filters while the other plant will specialize in liquid filters. These two new plants, expected to open in CY14, represent Donaldson's second manufacturing campus in China. Donaldson's successful first China campus in Wuxi opened in 1997 and currently has four manufacturing plants.

"We are very pleased to add these two new plants to our existing manufacturing and distribution base in China and have appreciated the wonderful support of the local Xuzhou Economic & Technological Development Zone officials through the planning process," says Eugene Wu, Donaldson's president of Asia Pacific. "During the last 15 years we have developed strong relationships with many local Original Equipment Manufacturers and Aftermarket Customers. As the industrial and diesel-powered equipment markets continue to develop and expand in China, these new plants will allow us to both further increase our air filter manufacturing capacity and establish our first Chinese-based liquid filtration manufacturing capacity to meet our projected Chinese customer demand."

"We warmly welcome Donaldson, a leading worldwide filtration solutions company, to build manufacturing plants in Xuzhou," says Zhang Fu Ning, standing committee member, Xuzhou Municipal Government and party secretary of Xuzhou Economic & Technological Development Zone. "With Xuzhou's reputation as the capital of construction machinery in China, Donaldson's new plants will streamline the supply chain for our local construction equipment manufacturers. We will fully support Donaldson's development in the Xuzhou Economic Development Zone."

Ahlstrom Introduces Next Generation Transportation Air Filtration Media

Ahlstrom, a global high performance materials company, launched products for Transportation Air Filtration during the 11th World Filtration Congress in Graz, Austria.

Ahlstrom XAIR is a new portfolio of Automotive and Heavy Duty Air Filter media achieving exceptional efficiency in Soot filtration and Dust Holding Capacity having positive impact on engine lifetime, engine emission and fuel consumption.

The media can be processed in traditional high speed pleating machinery and is available with no curing, fast curing, flame retardant and water durable functionalities.

Noveko International Inc. recently announced that its subsidiary Noveko Inc. has delivered the first Noveko-IDP™ filters to AirTransat, Canada's leading holiday travel airline, to equip its entire Airbus A330 fleet. In many regards, these filters revolutionize air filtration in the aviation industry, acting as a purifier of the recirculated air in the cabins.

Air Transat's fleet comprises 23 aircraft, including 12 Airbus A330s. Other A330s will gradually be added to its fleet, replacing its A310s. Each A330 requires eight air filters.

"We are now intensifying the efforts to stimulate the commercialization of our filters for the Airbus A330s. In this regard, we are setting up a distribution network to reach the largest number of airlines in this high-potential market, which includes on a global scale more than 830 aircraft currently in operation, not to mention the many new planes on order. Concurrently, we are advancing in the STC certification for the Airbus A340 series, which require up to 15 filters per plane and represent a market of approximately 350 aircraft today. In addition, although we initially targeted the Airbus A330s and A340s, our filters can easily be adapted to any planes, further increasing their potential market," stated Mr. Alain Bolduc, President and Chief Operating Officer of Noveko International.

Noveko-IDP filters were developed in partnership by Noveko and IDP and incorporate Noveko's patented air filtration technologies. Thanks to these technologies, antimicrobial agents are incorporated into the very structure of Noveko's filtering membranes, protecting them against deterioration due to microorganisms. Results have shown a bacterial filtration effectiveness of over 99.9999% against tested microorganisms. Noveko-IDP filters attain ULPA (Ultra-Low Penetration Air) filtration levels, surpassing the level of classical HEPA filters. They provide an unparalleled solution in terms of useful life, equivalent to 8,500 hours of flight, i.e. 50 percent more than classical filters, considerably reducing the costs associated with their replacement. Noveko's filtering membranes also incorporate technologies designed to eliminate VOCs (volatile organic compounds), offering superior odour management.

AAF International is planning to close its 340 000 sq ft Hutchins plant in Texas by the end of September 2012.

The closure will result in the loss of a majority of the jobs at the Hutchins facility. The AAF Hutchins plant, which produces panel and pleated filters, currently has 100 hourly and salaried employees.

AAF says that this restructuring will allow the company to more effectively serve its entire customer base in North America with a more responsive manufacturing and distribution footprint.

"AAF will work with our customers in the coming weeks to provide a seamless transition of supply," said Greg Parlee, AAF’s vice president of sales for air filter products Americas.

Flanders Corporation (OTCQX: FLDR), one of the largest manufacturers of air filters, air handling and containment systems, and related products in North America, recently announced that it has entered into a definitive agreement to be acquired by an affiliate of Insight Equity Holdings LLC (Insight Equity), a middle-market private equity firm, in a transaction valued at approximately $192 million excluding fees and expenses.

Under the terms of the agreement, upon consummation of the transaction Flanders’ shareholders will receive $4.40 per share in cash for each share of Flanders’ common stock, representing a premium of 39 percent over the average closing share price of $3.17 during the last 30 days ending March 16, 2012 and a 42 percent premium over Flanders’ average closing share price of $3.10 during the last 90 days ending March 16, 2012.

Flanders’ board of directors unanimously approved the transaction and will recommend that Flanders’ shareholders adopt the agreement. In addition, certain Flanders’ shareholders, including some members of senior management have executed agreements to vote their shares in favor of the transaction.

The transaction is subject to shareholder approval and other customary closing conditions and is targeted to close in the second quarter of 2012.

At the closing of the transaction, Air Acquisition Inc., an affiliate of Insight Equity, will merge with and into Flanders Corporation, with Flanders Corp. surviving as a wholly-owned subsidiary of Air Acquisition Holdings LLC, another affiliate of Insight Equity.

Insight Equity Holdings LLC is a private equity firm specializing in middle market firms that have annual revenue of more than $100 million but less than $750 million.

Nonwovens producer Sandler is supplying nonwovens to the vacuum cleaner bag market. Bags using synthetic filter media offer a number of advantages, according to the German company, including higher suction power and better tear and moisture resistance the traditional paper bags.

All of Sandler’s materials, which combine several types of nonwovens types, are certified according to Oeko-Tex Standard 100. These synthetic materials are therefore entirely safe, even for the youngest family members. Sandler media also cover the HEPA filter grades H10 and H11 – offering even more protection, allowing not only people with allergies to breathe easy.

Sandler’s latest development in the field of synthetic vacuum cleaner bags uses PLA, a polymer based on lactic acid and is made of renewable resources such as corn. This material features a similar performance as other high-quality synthetics and its quick drying also makes it ideally suited for application in the vacuum cleaner bag market. At the end of the product lifecycle, the advantages of a natural raw material become apparent: PLA-based media are compostable and can be recycled using established processes.

Beyond the PLA-based product Sandler offers a broad spectrum of nonwovens for vacuum cleaner bags ranging from standard spunmelt structures to customized solutions.

Teda Filters Co. Ltd has a wide array of filter media products on display at ANEX 2012. This year the company installed two new meltblown lines to service the automotive and liquid filtration industries, complementing its four other production lines.

The company specializes in meltblown technology for the production of air and liquid filtration media, thermal insulation for clothes, automobile sound and heat insulation material.

After developing micro-fiber polypropylene meltblown thermal insulation material (Teda Mian), the company began supplying thermal-wear uniforms for China’s army and police.

A variety of filtration products with international certifications also includes surgical and dust-proof suit media; air filtration for HVAC units; and acoustic insulation media.

Web site:  www.mcilvainecompany.com