The managers and employees of Performance Fibers Inc. are ending 2005 with much more confidence and fewer uncertainties. A little more than a year ago, the Colonial Heights-based manufacturer of polyester and other synthetic fibers was looking for a home. It was still a business unit of the industrial conglomerate Honeywell International Inc., but it didn't fit well into its parent company's corporate strategy. The management team at Performance Fibers, including General Manager Mr. Greg Rogowski, believed that the company had enormous growth potential if it could find a partner to support it. In December 2004, the team got that chance when Honeywell sold Performance Fibers to Sun Capital Partners. The Florida-based investment group specializes in acquiring so-called ‘corporate orphans’, businesses that have been neglected as part of larger corporations but have the potential to grow independently. Sun Capital has invested in more than 100 companies since 1995. The sale provided Performance Fibers with a source of capital and freed the company to pursue business opportunities, setting off a whirlwind year of acquisitions and growth. “Being a smaller, stand-alone company makes us a lot more flexible and agile”, said Mr. Rogowski, a 19-year veteran of the business and now the company's President and Chief Executive Officer. Still, leaving the relative security of a global conglomerate for a new owner brought stress and uncertainty. Performance Fibers has 50 employees in the Richmond area and about 1,735 at other locations, including manufacturing sites in New Hill, N.C.; Scottsboro and Winfield, Ala.; Longlaville, France; Seoul, South Korea; and Kaiping, China. “When the employees started seeing how fast we were moving once we were a stand-alone company,” Rogowski said, “people's confidence started to elevate quickly” Rogowski said. With acquisitions and organic growth, the company's revenue will reach about $500 million by year's end from $400 million the previous year, and it is on track for a $600 million year in 2006. Performance Fibers is in the polyester business, but not the type of textile polyester that might be in your shirt. The company makes high-tenacity industrial polyester, which is used in conveyor belts, ropes, seat belts, air bags and other products. The company also is a major manufacturer of the high-strength polyester that helps prevent tires from falling apart at 60 mph. That market is growing thanks to new concerns about tire safety. About half of Performance Fibers' business is in tire polyester, and the company has a 30 percent share of the global market. Managers are looking to build on that. They're pursuing growth in Asia, particularly in China, where the automotive market is growing 25 per cent to 30 per cent a year. One of the company's major investments this year was an
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| expansion of its manufacturing operations in China. Performance Fibers had already doubled the capacity of the Kaiping plant in early 2005. The company also started building a second polyester fiber and fabric plant in Kaiping, which will again double capacity. In October, the company bought full ownership of the operation from its joint-venture partner, which was government owned. From its manufacturing bases in China and Korea, the company is looking to expand into growing markets in Southeast Asia and India, where the potential is enormous. According to Mr. Rogowski “Eastern Europe also have lot of opportunities for us. We are well-positioned for that with our plant in France.” Performance Fibers also added to its North American operations. In August, the company acquired the North American operations of Diolen Industrial Fibers, with headquarters in Scottsboro, Ala. The purchase included a high-tenacity polyester yarn plant in Scottsboro and a fabric converting facility in Winfield, Ala. Mr. Rogowski and Mr. Fred Indermaur, the company's Vice President of operations, point to that acquisition to emphasize that the company's international investments do not mean lost U.S. production and jobs. “People talk about the demise of U.S. manufacturing, but the United States is still the largest market in the world for our products,” Mr. Rogowski said. “We have earned the right to play in this market, and we are now investing in the new assets that we have just acquired to make them competitive”, he added. Mr. Indermaur, who also heads the company's efficiency efforts, added that plants in the developed world have “challenges to competing with lower-cost regions. But in reality, our highest cost is not labor, but raw materials. Our goal is to be the lowest-cost producer in whatever market we are in.” The company is working to improve operating efficiencies while also introducing value-added products that can keep it competitive in developed markets. Among the new products is A360, polyester than can be used as a lower-cost substitute for rayon in high-performance tires. Since its sale last year, Performance Fibers has maintained its Virginia headquarters such as, home to its executive leadership, supplier management, information technology, legal, operations, sales and marketing -- in offices leased from Honeywell at its Chesterfield County technical center. Early next year, Performance Fibers will fully complete its transition to independence when it moves its headquarters into an office at 707 E. Main St. in Richmond. Mr. Rogowski said a downtown headquarters will put the corporate staff closer to the airport and thus closer to its global operations. He ended by saying, “Also, it is in the center of the Richmond financial community and legal community, We wanted to be close to that in anticipation of a lot activity over the next few years.” 
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