Unitika Seeking Buyer for Nonwovens Business

2025-01-03 22:00

Unitika has announced plans to withdraw from the textile business and find buyers for its nonwovens and fiber units. According to the Japanese company, the operations generate approximately 40% of the company’s revenues. The group’s nonwovens business includes polyester spunbond and spunlace nonwovens made at production facilities in Japan and Thailand with a total estimated capacity of 30,000 tons per year.

The decision to exit the textiles business comes amidst growing competition from Chinese companies. Unitika projects a consolidated net loss of ¥10.3 billion yen for fiscal 2024, its second straight year in the red. Its equity has shrunk by ¥7.3 billion to ¥29.4 billion from late March to the end of September.

To aid Unitika's restructuring, lenders such as MUFG Bank, Mizuho Bank and Sumitomo Mitsui Trust Bank that do business with the company are expected to waive ¥30-40 billion. Meanwhile, public-private fund Regional Economy Vitalization Corp. of Japan will acquire around ¥20 billion of preferred stock with voting rights in Unitika to take a majority of voting shares and support the restructuring.

Unitika began efforts to revamp its struggling fiber-related operations in 2014, including moving production to Thailand and cutting costs, b ut the efforts have been unsuccessful, especially given the recent weakness in the yen.

The company plans to focus on food packaging films and other polymer products that are experiencing growth in Southeast Asia and other markets.