Nonwovens growth leads to consolidation

The Russian nonwovens are on the verge of consolidation, mainly due to the recent acquisition of Regent NM, one of Russia’s major nonwovens producers, by its rival Moscow-based Netkanika Company. The deal, worth US$ 25 million, is one of the largest to be concluded in the industry in recent years.

To date, Regent NM was operated by Russian billionaires the Ananiev brothers, through their subsidiary Promsvyazbank. As a result of the deal, Netkanika aims to control up to 20% of the Russian market for nonwoven materials.

The majority of the company’s products are supplied to the Russian agricultural industry, hygiene, disposable and medical clothing, mattresses, and protective membranes. In total, the company’s production capacity is around 8,000 tonnes per year. Regent NM also operates production facilities with the capacity to produce up to 20,000 tonnes per year.

After integration of the newly acquired asset, Netkanika plans to invest around US$ 10 million in modernization and increase its capacity by 40%. This should help the company achieve its recently announced plans to capture 20% of the nonwovens market in Russia.

Overall, the domestic nonwovens industry is steadily growing this year, amid the on-going recovery of the national economy from the financial crisis. According to Denis Manturov, Russia’s Minister of Industry and Trade, since the beginning of the current year, the industry has already grown by 35% to US$ 600 million in value terms, compared to the same period of last year, a record high in the last 36 months.

According to the Russian Ministry of Industry and Trade, if the same growth rates are achieved in the second half of the current year, the total value of the market could reach US$ 1.2 billion, a historical record for the nonwovens industry in Russia.


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