AIR FILTRATION MARKET UPDATE

July 2011

McIlvaine Company

www.mcilvainecompany.com

 

 

TABLE OF CONTENTS

CONSTRUCTION

U.S. Housing Starts Increase 14 percent in June

FINANCIALS

Ahlstrom Updates Outlook for 2011 Operating Profit

Clarcor Reports Second Quarter 2011 Results

INDUSTRY NEWS

Chicago’s Metra Commuter Rail Service Will Clear the Air in Its Train Cars

COMPANY NEWS

Lydall Announces Price Hike

AAF to Increase Prices on Commercial and Industrial Products

Buckeye to Close Canadian Facility

Atmosair Solutions Receives GSA Approval to Sell Products to Government Agencies

Nalco Program Helps VA Facility Improve Indoor Air Quality, Reduce Carbon Emissions

NEW PRODUCTS

Envirco New Air Filtration Unit for Cleanrooms

Samsung Introduces Air Conditioners with ‘Virus Doctor’ Technology

 

 

 

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

CONSTRUCTION

U.S. Housing Starts Increase 14 percent in June

Privately-owned housing starts in June were at a seasonally adjusted annual rate of 629,000. This is 14.6 percent above the revised May estimate of 549,000 and is 16.7 percent above the June 2010 rate of 539,000.

Single-family housing starts in June increased 9.4 percent above the revised May figure of 414,000. The June rate for units in buildings with five units or more was 170,000.

Building permits in June for privately owned housing were at a seasonally adjusted annual rate of 624,000. This is 2.5 percent above the revised May rate of 609,000 and is 6.7 percent above the June 2010 estimate of 585,000.

Single-family authorizations in June were at a rate of 407,000, about the same as the revised May figure of 406,000. Authorizations of units in buildings with five units or more were at a rate of 198,000 in June.

 

FINANCIALS

Ahlstrom Updates Outlook for 2011 Operating Profit

Ahlstrom expects its operating profit excluding non-recurring items (NRI) for 2011 to be lower than earlier anticipated due to continuing cost inflation in raw materials prices. As a result, Ahlstrom updates its 2011 outlook for operating profit excluding non-recurring items.

Ahlstrom's sales volumes have been developing as expected, but due to the more challenging than expected market conditions the company has not been able to fully pass on the increases in raw material cost to its selling prices. The company will maintain the current outlook for net sales, estimated at EUR 1,920-2,080 million. The revised outlook for operating profit before NRI is estimated to be EUR 75-95 million for the full year 2011 instead of the previous estimate of EUR 90-110 million.

Ahlstrom will continue to proactively manage its selling prices in order to compensate for the increases in raw materials prices. The company will also take action to further streamline its cost structure to gain efficiencies in the supply chain, particularly in manufacturing and sourcing.

Ahlstrom will publish its interim results for January-June on August 10, 2011.

 

Clarcor Reports Second Quarter 2011 Results

Clacor Inc. (NYSE: CLC) reported its financial results for the second quarter of 2011. The company reports a 12% increase in net sales, a 35% increase in operating profit and a 2.9 percentage point improvement in operating margin. Net sales for the quarter ending 5/28/2011 were $288.5 million and net earnings were $32.8 million.

Engine/Mobile Filtration Segment: Net sales in the Engine/Mobile Filtration segment increased $17.9 million, or 16%, compared with the second quarter of 2010. This increase was related primarily to higher volume of heavy-duty engine filter sales. Overall, sales increase in this reporting segment was the result of 21% growth outside the U.S., driven by China, and 13% growth domestically. Operating profit at our Engine/Mobile Filtration segment increased $6.0 million, or 25%, from the second quarter of 2010.

Industrial/Environmental Filtration Segment: Net sales in the Industrial/Environmental Filtration segment increased $15.9 million, or 14%, from the second quarter of 2010 with relatively balanced growth geographically including 16% international growth and 12% domestic growth. Growth in domestic sales was due to higher sales across many of diverse end-markets including air filtration, aviation, dust collector systems and incremental sales from the acquisition of TransWeb. This domestic growth was due to improved economic conditions compared with last year’s second quarter in addition to new product offerings in air filtration. Sales growth outside the U.S. was partially driven by higher natural gas vessel and aftermarket filter sales in both Asia and Canada.

Operating profit in the Industrial/Environmental Filtration segment increased $5.8 million, or 56%, from the second quarter of 2010.

Packaging Segment: Net sales in the Packaging segment declined $3.2 million, or 12%, from the second quarter of 2010.

Norm Johnson, Clacor’s Chairman and Chief Executive Officer, said, "The second quarter continued a string of successful quarters at Clacor…Of special note, improvement at our Industrial/Environmental Filtration segment continued in the second quarter as it generated a 12.1% operating margin, keeping us solidly on track to exceed the 10% operating margin target for the full year.

"Our focus on growth is evident from our most recent financial results. Certainly, some of this growth was based upon the economic recovery, but our double-digit increase in sales would not have been possible without our efforts to introduce new products, enter new markets and further develop our international presence. We continue to build a strong foundation in China as we grew sales by 43% compared to the second quarter of 2010 primarily in our Engine/Mobile Filtration segment. In addition, we are expanding our presence in China in our Industrial/Environmental Filtration segment as we launch a new wire mesh filtration manufacturing facility in Quzhou in June."

Updated projected sales growth and operating margin by segment and on a consolidated basis are as follows:

2011 Estimated Sales Growth

2011 Estimated Operating Margin

Engine/Mobile Filtration

14.5% to 16.0%

20.5% to 22.0%

Industrial/Environmental Filtration

13.0% to 14.0%

10.0% to 11.0%

Packaging

-5.0% to -2.0%

9.0% to 11.0%

CLARCOR

12.0% to 13.5%

14.7% to 16.0%

 

INDUSTRY NEWS

Chicago’s Metra Commuter Rail Service Will Clear the Air in Its Train Cars

After a Chicago Tribune investigation, Metra railroad plans install high-efficiency filters to reduce soot pollution inside its stainless-steel cars. But diesel pollution will remain a lingering problem on the platforms at Chicago's major rail stations.

Metra plans to spend $200,000 a year — less than two-hundredths of 1 percent of its $1.04 billion budget — to equip all of its cars with the MERV 13 high-efficiency filters that screen out diesel pollution. Testing showed the filters can reduce the average amount of diesel soot inside its cars by 75 percent during outbound trips. The filters will be installed in every car within 90 days.

 

COMPANY NEWS

 

Lydall Announces Price Hike

Lydall Filtration/Separation, Inc. has announced a general price increase effective with orders shipped on or after September 12, 2011. This increase is necessary as a result of industry-wide continuing increases in raw material costs such as glass fiber, resins, energy and freight.

The price increase covers all products and areas of Lydall Filtration / Separation's global business, varying by product line. Microglass products will see increases ranging from 6% to 8%. Synthetic products will see increases of up to 12%, depending upon the structure of pricing agreements currently in place.

The company says customers will be contacted by their account manager to discuss the specifics of this increase and implementation with current pricing agreements.

 

AAF to Increase Prices on Commercial and Industrial Products

Effective September 6, 2011, AAF International (AmericanAirFilter®) will implement a price increase on all Commercial and Industrial air filtration products. The company states in a press release that they have worked closely with suppliers to control the unprecedented cost increases and have aggressively pursued saving opportunities and process improvements that do not affect product quality or service levels, but despite best efforts are forced to increase prices.

 

Buckeye to Close Canadian Facility

Airlaid producer Buckeye Technologies will close its Delta, B.C., Canada airlaid nonwovens facility by the end of calendar 2012. The Memphis, TN-based company will work closely with its customers to continue to meet their needs by sourcing products currently produced at Delta from its facilities in Gaston County, NC and Steinfurt, Germany.

Buckeye chairman John Crowe attributed several factors to the closure. These include an unfavorable site location relative to customers and raw material suppliers, a strong Canadian dollar and low capacity utilization.

Buckeye has owned and operated the Delta facility since 1997. In the fall of 2010, the company consolidated its production from a two machine operation to one airlaid machine to improve profitability. While margins did improve following this consolidation, the plant's forecasted financial performance remains at an unacceptable level, Mr. Crowe added.

Buckeye expects to incur a non-cash asset impairment charge of about $15 million and $5 million in restructuring expenses between now and December 31, 2012. The closure is expected to generate about $30 million in cash over the next 18 months, primarily through the sale of land and buildings and a net reduction in working capital.

 

Atmosair Solutions Receives GSA Approval to Sell Products to Government Agencies

AtmosAir Solutions of Fairfield, CT, has received US General Service Administration (GSA) approval to sell its products to dozens of government agencies, including the military.

AtmosAir Solutions provides bi-polar ionization air purification products that significantly reduces mold, dust, odors, controls bacteria and the spread of airborne viruses, and reduces airborne particles and germs that get past normal heating and air conditioning ventilation and filtration systems in professional sports facilities, homes and businesses. The company's technology involves an all-natural process and produces no harmful by-products such as ozone or ultraviolet light, commonly found in many other products.

The US Army is already using AtmosAir devices at some bases as a part of a strategy to reduce energy usage and carbon footprint, and to help with compliance to US government workplace health and wellness guidelines.

AtmosAir’s clients include McDonald’s, Nestlé’s, Siemens, Walter Reed Army Hospital, New York’s Hospital for Special Surgery, Hyatt and Hilton Hotels.

The six-year-old firm has seen its business boom in the past year, with sales up 20 percent.

 

Nalco Program Helps VA Facility Improve Indoor Air Quality, Reduce Carbon Emissions

Nalco (NYSE: NLC), providing essential expertise for water, energy and air, has helped the Veterans Administration's Fayetteville VA Medical Center (FVAMC) in North Carolina reduce energy use, cut utility costs and avoid the release of more than 1,920 tons of greenhouse gas annually.

Hospital officials wanted to increase the building's energy efficiency and improve indoor air quality for patients and staff at the 70-year old facility. Individual rooms and offices are heated and cooled by fan coils, individual wall-mounted heating and cooling units that were installed 35 years ago.

The FVAMC environmental team approached Nalco for a solution. Nalco engineers applied patented COIL-FLO® technology to deep clean and disinfect the coils, installed high efficiency, antimicrobial filters and thoroughly cleaned and disinfected the internal surfaces of each unit.

Air temperatures are now more consistent and the filters reduced particulates in patient care areas by as much as 90 percent, helping eliminate odors and creating a safer, more pleasant environment for both patients and staff members.

Shelley Reeder, the medical center's Green Environmental Management Systems coordinator, said the difference after the project's completion was noticeable.

Improved efficiency reduced the hospital's utility costs by $154,000 per year and the total cost of the project was repaid in energy savings within seven months. Greenhouse gas savings were equal to removing more than 340 cars a year from the road.

The project won a 2011 VA Sustainability Achievement Award which is given to VA employees and facilities who have demonstrated outstanding environmental stewardship and whose efforts have resulted in significant contributions to the environment. One requirement for the award was that the project could be duplicated at other VA facilities. The Salisbury, N.C., VAMC is adopting a fan coil cleaning project of its own.

 

NEW PRODUCTS

 

Envirco New Air Filtration Unit for Cleanrooms

Trion has launched the new Envirco MAC 10® LE-DC unit, an air filtration unit for cleanrooms. The MAC 10 LE-DC is the latest in its successful MAC 10 family of fan filter units and features the most control options and the most versatile control system available on the market today, the company states on its website.

The Envirco MAC 10 LE-DC incorporates DC motor technology with a proprietary baffling system and backward curved fan (except 600mm x 600mm). The electronically commutative motor features an internal micro-computer and energy consumption is as low as 50W at 0.45 m/s (600mm x 1210mm STD unit).

The STD unit can operate at sound levels as low as 45 dBa and over a wide pressure range. It provides 250Pa of external static pressure (ESP) capability (except in the 600mm x 600mm unit) even when using very high grade filters ULPA (U15, U16 and U17) to meet ISO clean room class 4 and above.

The standard MAC 10 LE-DC is available in a range of sizes including 585mm x 585mm, 585mm x 1185mm and 1170mm x 1170mm, with a choice of custom size units also available to meet specific requirements. The units are equipped with a range of control options, including network control via Console, PC and PLC Control Systems. There are also room-side-replaceable (RSR) and room-side-replaceable-everything (RSRE) models which are ideal for areas with limited ceiling access or in applications where frequent filter changes are required.

 

Samsung Introduces Air Conditioners with ‘Virus Doctor’ Technology

Samsung Electronics, a market leader in consumer electronics, has unveiled its new range of premium air conditioners and ionizer devices, featuring the cutting edge Virus Doctor air filtration technology. The Virus Doctor kills 99.9% of all harmful organisms including SARS and H1N1, according to a press release. To distribute the new range, Samsung Egypt has partnered with one of Egypt’s largest air conditioning producers and distributors, TIBA, part of Al Manzalawi Group. The new partnership is expected to strengthen Samsung’s presence in the Egyptian market and a substantial foothold in the field of air conditioners. TIBA will produce and distribute the air conditioners in Egypt, the Middle East and Africa.

 

"At Samsung we strive to always be one step ahead. Being the first to introduce the international award winning Virus Doctor Technology to the Egyptian market, is something we are extremely proud of. Filtering the air with an anti-bacteria coating that can collect even the smallest dust particles and viruses, the Virus Doctor ensures a fresher, healthier environment." said Duke Park, Samsung’s Cairo Office General Manager. Commenting on their partnership with TIBA, Park added, "We are very excited to be working with TIBA and looking forward to the fruitful outcome of our partnership with TIBA, a partner who brings with them more than 32 years of experience in the field of air conditioner manufacturing."

McIlvaine Company

Northfield, IL 60093-2743

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

E-mail:  editor@mcilvainecompany.com

Web site:  www.mcilvainecompany.com