811 Air Filtration Market Update

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AEROSPACE

FOOD

DISK DRIVE

INDUSTRY

New European Standard EN779:2011

Particulate air filters used for indoor air quality are classified along the European standard EN779, among other classifications.

The new European standard for air filters, EN779:2011, comes into force in autumn 2011, updating standard EU779:2002. Its purpose is to classify air filters based on their lowest filtration efficiency, also referred to as minimum efficiency (ME). The latest version will have to be observed in all norms and standards that refer to the EN779.

Re-introduction of a minimum initial efficiency rating for fine filters

The EN 779:2002 abolished the minimum initial efficiency of fine filters. Only the average efficiency rating was considered in order to achieve a certain classification. In the EN 779:2011, the Standards committee addressed this problem and a minimum initial efficiency rating for the classification of fine filters is compulsory again.

Classification

Filters found to have an average efficiency value of less than 40% on 0.4µm particles will be allocated to the coarse filter group (G1 -G4). The classification G1 - G4 is based on the average arrestance with the loading of dust.

If the average efficiency value, lies between 40 and 80% on 0.4µm particles, the filter is allocated to the new medium filter group (M5 - M6). The classification M5 or M6 is based on the average efficiency on 0.4 µm particles.

Filters found to have an average efficiency value of 80% or more on 0.4µm particles will be allocated to the fine filter group and the classification F7 - F9 is based on their average efficiency as in the previous norm.

In the new EN 779:2011, two separate measurements of the initial efficiency are conducted: one on the filter element and another one on a flat sheet media sample.

New definitions and filter class

Filter group F5-F9 is divided into two separate groups. A new filter group, called "medium filters" is introduced for filters with classes "F5 and F6". They are re-named "M5 and M6" where the "M" stands for "medium".

The group of "fine filters" is now restricted to the classes "F7, F8 and F9", and retain their previous classification limits, but a minimum initial efficiency requirement has been introduced.

The new minimum initial efficiencies are 35% for F7, 55% for F8 and 70% for F9.

Filter group	Filter class	Final pressure drop (test) Pa	Average Arrestance (Am) of synthetic dust	Average efficiency (Em) for 0.4 μm particles	Minimum efficiency for 0.4 μm particles*
Course	G1	250	50% ≤ A_m < 65%	-	-
	G2	250	65% ≤ A_m < 80%	-	-
	G3	250	80% ≤ A_m < 90%	-	-
	G4	250	90% ≤ A_m	-	-
Medium	M5	450	-	40% ≤ E_m < 60%	-
	M6	450	-	60% ≤ E_m < 80%	-
Fine	F7	450	-	80% ≤ E_m < 90%	35%
	F8	450	-	90% ≤ E_m < 95%	55%
	F9	450	-	95% ≤ E_m	70%
*Minimum efficiency is the lowest of any of the following three values: initial efficiency, discharged efficiency or efficiency throughout the test’s loading procedure.

CONSTRUCTION

U.S. Housing Starts Down in July

Housing starts in the U.S. were 604,000 for July, down1.5 percent from the prior month and up 9.8 percent from the prior year. Overall building permits in July 2011 were 597,000, down 3.2 percent from June and up 3.8 percent from July 2010.

Construction of single-family houses decreased 4.9 percent to a 425,000 rate in July from the prior month, and permits rose 0.5 percent.

Work on multi-family homes, such as townhouses and apartment builders, climbed 7.8 percent to an annual rate of 179,000.

The regional breakdown saw huge swings among two of the four areas. Starts fell 38 percent in the Midwest and jumped 35 percent in the Northeast. They rose 5.6 percent in the South and fell 3 percent in the West.

FINANCIALS

Kimberly-Clark Announces Second Quarter 2011 Results

Kimberly-Clark Corporation (NYSE: KMB) recently reported second quarter 2011 results and updated its full-year 2011 key planning assumptions. Second quarter 2011 net sales were an all-time record $5.3 billion and increased 8 percent. Organic sales, which exclude the impact of changes in foreign currency rates, rose 3 percent, driven by higher sales volumes and net selling prices. The organic growth was highlighted by an 8 percent increase in K-C International.

Operating profit was $625 million in the second quarter of 2011, down 12 percent from $711 million in 2010.

K-C Professional (KCP) & Other Segment, which includes air and liquid media filtration operations, increased sales 6 percent in the second quarter to $846 million.

In January of 2011, the company initiated a pulp and tissue restructuring in order to exit its remaining integrated pulp manufacturing operations and improve the underlying profitability and return on invested capital of its consumer tissue and K-C Professional businesses. The restructuring is expected to be completed by the end of 2012, with total costs of $280 to $420 million after tax ($400 to $600 million pre-tax). As a result of the restructuring, the company expects that by 2013 annual net sales will decrease by $250 to $300 million and operating profit will increase by at least $75 million. These estimates are unchanged from the original projections announced in January.

Year-To-Date Results

For the first six months of 2011, sales of $10.3 billion increased 6 percent, including a favorable currency benefit of 3 percent. Organic sales rose 3 percent, driven by increased sales volumes of 2 percent and higher net selling prices of 1 percent. Year-to-date operating profit of $1,169 million declined 15 percent compared to $1,376 million in 2010.

Outlook

The updated outlook states net sales to increase of approximately 5 to 7 percent versus previous guidance for an increase of 4 to 6 percent. The company continues to expect that organic sales will grow 2 to 4 percent. Volumes are anticipated to grow 1 to 2 percent and the combination of higher net selling prices and improved product mix should contribute 1 to 2 points of additional growth.

Lydall Second Quarter and Six Month Financial Results

Lydall, Inc. (NYSE: LDL) announced financial results for the second quarter and six months ended June 30, 2011.

Net sales for the second quarter were $98.8 million, an increase from the second quarter of the prior year by 28.2%, primarily attributable to the Thermal/Acoustical segment, which increased by 41.9% to almost $60 million. Second quarter net sales for the Performance Materials Segment was $35.9 million. Life Sciences Vital Fluids second quarter sales were $3.4 million.

Sales for the six months ended June 30, 2011 were $200.5 million.

Fiberweb Announces Six Month Results

Fiberweb’s total revenues up more than 10% in the first half to £ 255.5 million.

With stable conditions in most markets, trading volumes were 2.4% ahead of the equivalent period last year. The strongest trading performance has been in the polypropylene spunbond hygiene business in Europe and through the FitesaFiberweb joint venture in the Americas. Strong volumes have also been seen in European roofing and filtration in the Americas and in Europe.

A sharp increase in raw material prices in the first half of 2011, coupled with the contractual lag in Hygiene pass-through and the normal lead-time for Industrial price increases has caused some pressure on margins in the first half. Raw material prices increased by approximately 18% versus the average equivalent blended price for the fourth quarter of 2010, with the peak seen in May. This cost increase has been partly mitigated through volume growth and further improvements in operational efficiencies and in mix, resulting in a net adverse impact of £6.1 million in the period. The raw materials impact is expected to be fully recovered in the second half as a consequence of price increases in Hygiene and Industrial, increased hedging, lower raw material prices and further cost measures.

The newly created Geosynthetics business within the Industrial division successfully completed two acquisitions which were integrated under a new management team.

Key Financials

	Six months ended
£ million (except where otherwise indicated)	30 June	30 June
	2011	2010
	(unaudited)	(unaudited)
Results from underlying⁽²⁾ operations:
Revenue	255.5	231.7
Underlying⁽²⁾ Operating Profit	12.0	13.6
Underlying⁽²⁾ Profit before Tax	3.0	6.9
Adjusted⁽²⁾ Earnings per Share (pence)	3.1	5.1
Results after restructuring costs, amortisation of acquired intangibles and other non-recurring items
Operating Profit	3.6	9.4
(Loss)/ Profit before Tax	(5.4)	2.7
Basic (Loss)/ Earnings per Share (pence)	(1.6)	2.1
Net Cash Flow from Operating Activities	14.8	25.2
Net Debt	129.6	141.8
Proposed Interim Dividend per Share (pence)	1.0	1.7

^{1 Like-for-like after adjusting for the impact
of the Boddingtons and Tubex acquistions in the period
^{2 Underlying operating profit, underlying profit
before tax and adjusted earnings per share are stated before restructuring
costs, amortisation of acquired intangibles and other non-recurring items as set
out in note 5 to the condensed consolidated financial statements

COMPANY NEWS

Madison Capital Partners
Acquires Filtration Group

Filtration Group, Inc. has been sold to Madison
Capital Partners for an undisclosed amount in cash, in a leveraged buyout
transaction.

Filtration Group, Joliet, IL, is a privately held
manufacturer and wholesaler of air, gas, and process filtration products for
commercial and industrial markets.

Madison Capital Partners, a Chicago based investment
firm, acquires and grows industrial market leaders. Madison has financed the
growth of over 28 successful multinational corporations.

Nanogate Awarded Project to
Develop Energy-Efficient Fine-Particle Filters

Nanogate AG, an international integrated systems
provider for nanosurfaces, is developing an innovative coating for fine-particle
filters with the financial support of the German environmental organisation
Deutsche Bundesstiftung Umwelt (DBU). The project centres on reducing the energy
needed to operate filters in ventilation and air-conditioning systems. It has
been awarded a grant worth a sizeable six-figure euro sum.

The development aims to increase filter efficiency by
improving dust recovery. In addition to this, the project is seeking to enhance
the filters' durability, thereby significantly improving cost-effectiveness.
There are many uses for filter fleeces with enhanced properties. These range
from exhaust and ventilation technology in industrial systems to domestic
air-conditioning and ventilation systems which are increasingly becoming
standard for low-energy and passive-energy homes.

Ralf Zastrau, CEO of Nanogate AG, comments: "We see
this grant from the DBU as great recognition of our long-standing expertise in
air filtration. As fine- particle filters are now used in both large-scale
industrial systems and private homes, we believe there are good sales
opportunities which will enable our energy-efficient products to contribute
towards optimum energy utilisation in a range of applications."

Technical background:
In dust and fine-particle filtration, a filter's
performance is determined primarily by its fibre density. Higher-performance
filters – those designed to recover the most dust – need denser filter material.
However, the disadvantage of this technology is that with higher filter density
the pressure loss experienced during filter use is also higher. This means that
considerably more energy is needed to force air through the filter. With the
right filter finish, it is possible to achieve higher dust recovery without
altering the density of the filter material. The pressure loss is therefore the
same as for an untreated filter, leading to improved filter efficiency without
increased energy consumption.

Nanogate is an international integrated systems
provider for nanosurfaces, concentrating primarily on enhancing high-performance
surfaces. The firm, which is based in Göttelborn (Saarland), enables the
programming and integration of additional properties – such as non-stick,
antibacterial, anti-corrosive and ultra-low friction – into materials and
surfaces. As an enabler, Nanogate gains a competitive edge for its customers by
means of product refinement using chemical nanotechnology. Nanogate covers a
wide range of industries, functions and substrates. The company thus provides a
decisive interface for the commercial use of chemical nanotechnology and bridges
the gap between the suppliers of raw materials and industrial conversion into
products. In doing so, Nanogate concentrates as an enabler on one of the most
attractive segments in the industry. Nanogate has a unique combination of
extensive materials expertise paired with comprehensive, first-class process and
production know-how. As a systems provider, Nanogate covers the entire value
chain, from the purchase of raw materials, to the synthesis and formulation of
the material systems, right through to the enhancement and production of the
finished surfaces. Nanogate focuses primarily on plastic and metal coatings for
all surface types (two and three-dimensional components).

Ahlstrom to Divest Home and
Personal Business
Ahlstrom Corporation has signed an agreement to divest
its wipes fabrics business area, Home and Personal, to Suominen Corporation, a
flexible packaging, wet wipes and nonwovens company based in Tampere, Finland.
The total value of the transaction is approximately EUR 170 million.

Under the agreement, Ahlstrom sells the operations of
its Home and Personal business area to Suominen and receives a total of EUR 170
million in cash, of which Ahlstrom has committed to use a total of EUR 30
million to subscribe for shares in Suominen. Suominen will finance the
transaction through debt and proceeds received in a planned directed share
issue.

After a successful share issue, Ahlstrom will become
the largest shareholder in Suominen with a minimum stake of 20% and a maximum
stake of 28.2% depending on the size of the share issue. The cash portion of the
deal will be adjusted accordingly. Ahlstrom has agreed to a two-year lock-up
period for a minimum of 20% ownership in holding its Suominen shares.

In line with Ahlstrom's strategy, the divestment will
steer the company towards a more focused business and product portfolio. In
2009, Ahlstrom conducted a strategic review leading to a revised organization
and operating model.

"We have been building our business portfolio based on
offering high performance materials that allow our customers to differentiate
and create value to their customers. We will continue to seek growth and global
leadership in all segments in which we operate. This transaction allows us to
free resources to strengthening and further developing our current businesses,
especially in the fast-growing markets in Asia." says Jan Lång, president and
CEO at Ahlstrom.

The transaction between Ahlstrom and Suominen will
create a company that can reinforce its position as the global leader in
developing and manufacturing roll goods nonwovens for wipes. The new entity will
be stronger in serving its existing and future customers by offering a
comprehensive product range in wipes fabrics as well as a broad market presence.

ITW Dynatec Europe Acquires
Inatec GmbH

ITW Dynatec Europe has announced the acquisition of
Inatec GmbH, designers and manufacturers of hot melt adhesive application
systems located in Langenfeld, Germany.

"The purchase of Inatec GmbH further strengthens ITW
Dynatec´s position as a premier adhesive applications provider to the coating &
laminating markets worldwide. Inatec GmbH has several unique adhesive
application technologies that greatly complement our industry-leading
non-contact products such as Uniform Fiber Deposition (UFD) and DeltaFx.
Furthermore, Inatec´s expertise in the reactive adhesives (PUR) markets will
allow ITW Dynatec to further position itself as a leading adhesive application
solutions provider to global markets including technical textiles, automotive
and filtration," says Christof Schotten, vice president and general manager,
World Wide ITW Dynatec. "Inatec GmbH is an ideal fit to our growing adhesive
application business and we look forward to working with the innovative and
experienced people of Inatec."

Both companies will continue to operate independently.
The terms of the deal were not disclosed.

ITW Dynatec provides adhesive application systems for
the disposable hygiene, coating and laminating and packaging markets, operating
with subsidiaries in North America, Europe and Asia with an extensive worldwide
sales and service network.

NEW PRODUCTS

Vokes Air Introduces New Range
Macrogen GT Duo for Gas Turbine Air Intake

The Macrogen GT Duo combines water coalescing and
pre-filtration functions into one, rendering the separate coalescer stage
redundant, thus allowing its removal. With the air intake one stage lighter, the
pressure drop of the system will be dramatically reduced, maximizing output and
minimizing cost. Usually, a reduction in pressure drop of 50 Pa will increase
efficiency of the entire GT by around 0.1%. Furthermore, with fewer filters to
buy, install, remove and dispose, significant reductions can be achieved to the
cost of operating the entire system.

Since 2007, Macrogen GT Duo has been employed by gas
turbine operators seeking the efficiency savings offered by an all-in-one
filtration stage. While this original design succeeded for coarse dust
environments, there was also a need for a higher grade device, suited to fine
dust applications. Furthermore, to meet the diverse requirements of customers
worldwide and allow simple integration with current systems, alternative
configurations of Macrogen GT Duo were called for. Because of this, the Macrogen
GT Duo range has been completely overhauled with two depths in three frame
types, to provide a full array of models for the gas turbine market.

A 100 mm deep panel offers efficiency to G4 (EN 779)
and a 150 mm version provides protection to filter class F5. Macrogen GT Duo-100
is designed for the efficient separation of coarse dust emissions, with the 150
version suited to the filtration of smaller fine dust particles as well.

The Vokes Air Macrogen GT Duo is also now available in
two frame configurations - a box design (N) or a flanged format (F) - to provide
even greater flexibility and simplified integration with current systems. The
traditional box format is installed in standard panel filter apertures, with the
flanged version designed as a direct replacement for bag filters, thus requiring
no renovation to existing frameworks.

Where space is at a premium, the flanged Macrogen GT
Duo can be supplied in a reverse format to allow face-to-face installation with
our industry-leading Compatex TMP and TMPC intake filters, providing maximum
performance in a compact design.

Honeywell Low Pressure Sensor
for HVAC Filters

Honeywell has developed a new ultra-low pressure
sensor for HVAC applications. The TruStability Ultra-Low Pressure Sensors HSC
(High Accuracy Silicon Ceramic) Series and SSC (Standard Accuracy Silicon
Ceramic) Series have high sensitivity with high overpressure and burst pressure.
This technology protects the sensor and can sense very small changes in
pressure. It can also work in environmental factors such as temperature and
humidity.

"It is more difficult for a pressure sensor to
maintain high levels of stability in applications that require ultra-low
pressure ranges," said AJ Smith, global product marketing manager for Honeywell
Sensing and Control. "Typically, pressure sensors used for ultra-low pressure
applications are more susceptible to damage due to the high pressure
conditions."

These new devices provide an amplified compensated
digital or analogue output for reading pressure over the full scale pressure
span in the ultra-low pressure range of ±2.5 mbar to ±40 mbar.

They are suitable for use in industrial HVAC
applications, including VAV (variable air volume) control, static duct pressure,
clogged HVAC filter detection, HVAC transmitters, and indoor air quality.

McIlvaine Company
Northfield, IL 60093-2743
Tel: 847-784-0012 Fax:
847-784-0061
E-mail: editor@mcilvainecompany.com
Web site:
www.mcilvainecompany.com}}