Behind Albany International’s escalating success in aerospace composites is an inspiring story of management conviction based on a “cash and grow” strategy. Adrian Wilson reports. When the Albany Felt Company first started weaving textile belts for paper machines on the banks of the Hudson River in Albany, New York in 1895, Orville and Wilbur Wright were still eight years from raising the first plane over a wind-swept beach in North Carolina. Today’s paper-making machines operate at speeds in excess of 1,900m per minute and Albany is still weaving belts – commonly known as machine clothing (MC) – for them. Yet neither the Wright Brothers nor Albany’s founding fathers could have envisaged that in 2016, weaving technology would be central to the success of today’s most sophisticated new jet engine. Following over 280 successful test flights since May 2015, CFM International, the joint venture between GE Aviation and Snecma (Safran), delivered the first two LEAP engines to Airbus for a commercial customer this April. Their final assembly took place at the Snecma plant in Villaroche, France, and they are currently being installed on the first A320neo jetliner for entry into service very shortly. The CFM International LEAP is a high-bypass turbofan engine which will provide operators with double-digit improvements in fuel consumption and CO2 emissions compared to existing CFM engines, along with dramatic reductions in engine noise and exhaust gas emissions. It features some of the industry’s most advanced technology, and its fan blades and fan case are made from 3D woven carbon fibre composites, which is where Albany, now headquartered in Rochester, New Hampshire, comes in. A high risk strategy With sales of $709.9 million in 2015, Albany operates 22 plants in ten countries, employs 3,900 people worldwide and now comprises just two business units – Machine Clothing (MC), and Albany Engineered Composites (AEC). In 2010, however, it was a very different company. Its businesses also included the $148m Door Systems operation, wide-ranging engineered fabrics interests and the well-known Primaloft insulation brand. It then, however, boldly opted to sell off all of these businesses in pursuit of what president and CEO Joseph Morone called a “cash and grow” strategy, focused solely on the potential of AEC, albeit relying on the stable, cash-generation of Machine Clothing. This was clearly a high-risk strategy and one at odds with most companies in the long-term view it took, since AEC was virtually in the process of being built from scratch. It had evolved largely from the 1998 acquisition of a company called Techniweave which was merged with a second acquired company, Texas Composites, in 2006. Morone cautioned in 2010 that planned increases in fixed costs and investments were likely to result in the business being unprofitable until at least 2015. He added that progress depended on the success of new commercial and military aircraft programmes, as well as mastering the process of continuously driving down costs once contracts were secured and volumes increased. In 2016, his faith in AEC is looking fully justified. Machine Clothing has held steady, with 2015 earnings basically at the same level as in 2010, while AEC’s revenue has climbed from $42 million in 2010 to $101 million in 2015.
AEC was on course to hit $250m by the end of the decade even prior to the acquisition of the composite aerostructures division of Harris Corporation in February this year. “This acquisition essentially doubles the growth potential of AEC this decade,” Morone said. “If the combination of MC and AEC worked well for investors before the transaction, it should work even better now. The steady performance of MC should continue to provide the cash needed to maintain its global technology and talent leadership, while fuelling the accelerating growth at AEC. At the same time, AEC should provide positive cash flow later in the decade, along with the scope and scale needed to compete for the long haul in the highly concentrated aerospace industry.” And of course, a more balanced combination of “cash and grow”. AEC is the sole-source provider of 3D woven RTM fan blades and fan cases for the CFM LEAP engine which are manufactured at its plant in Rochester and also at Commercy in France, where it is co-located with Safran. A third LEAP plant is under construction in Queretaro, Mexico, with production slated to begin in 2017. As evidenced by the need for a third plant, the market for LEAP engines continues to grow at an unprecedented rate. To date, orders have totalled more than 10,500, and AEC is now preparing to grow production from roughly 2,500 blades and 100 cases in 2015 to more than 40,000 blades and 2,000 fan cases a year by 2020. This programme has the potential to account for as much as $200m in annual sales for AEC by 2020. Among other programmes, AEC also supplies Rolls-Royce with composite components for the LiftFan on the Joint Strike Fighter and for the BR725, the engine that powers the Gulfstream 65. 3D weaves its spell And at the heart of all this activity are the company’s weaving technologies which have been advanced over the past 120 years. Unlike conventional laminated composites, which are usually only reinforced in the plane of the laminate, or metallic alternatives, AEC’s 3D engineered composites are reinforced in multiple directions, including the through thickness. This enables a component, for example, to be designed to provide increased shear strength in one area and increased axial stiffness in another. By controlling the fibre architecture in this way, the company is able to engineer components that meet specific performance goals while simultaneously satisfying component cost, qualification, certification, and eventual production needs. With contour weaving, either single or multi-layer 3D woven axisymmetric structures with contoured cross sectional profiles can be manufactured so that the final woven preform shape is similar to that of the final component shape. AEC can also ‘steer’ reinforcement fibres to turn and follow the natural geometry of a part. These advanced weaving techniques both reduce part production costs and improve product structural performance. www.albint.com