Wellman, Inc (MWAN) operates as an international provider of polyester staple fiber and resin. The heady days of polyester in the 1970’s have certainly changed, and for the better. Wellman, Inc. recognized opportunity in 1998 capitalizing on new technology allowing the manufacture of products made out of a certain type of polyester raw material, better known as PET.
Most might recognize PET as soda and water bottles. Lesser known is the fact that the same raw material used for water bottles also makes up that $250.00 fleece pullover you got for Christmas, the weed control barrier you put down last summer, and the landfill liner that accepts all the trash you choose not to recycle.
Wellman is huge into recycling of these PET bottles and works to provide a balance between PET resin and fiber. Europe holds the company’s best options for playing in the recycled PET market as analysts there expect a 9% annual growth of PET recycling through 2011. Wellmans’ new facilities, in the Northern parts of the European Union, should provide excellent recycled PET possibilities as those Belgians’ are certainly ecofriendly when it comes to their trash.
Wellmans’ balance sheet in the US is not looking quite as friendly these days. Early December 1997 found the NYSE delisting the company because it failed to meet the exchanges over $1.00 per/share requirement for a 30 day period. Having to find a new home cannot be attributed to management being asleep at the switch as the company has been diligent in trimming its workforce and paying closer attention to costs. Convincing those in the know, however, appears to be a difficult task.
Taking a peak at the end-use markets that Wellman services gives an indication of where this company could be heading. It has a stable of established branded fiber products and works to market them in only a modest form. Wellman appears to be in the right place and at the right time. Getting it going appears to be the only issue.
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