System selling strategy of Archroma reduces textile processes’ resources and costs
Archroma is a leading specialty chemicals company committed to innovation, quality, service, cost-efficiency and sustainability. Headquartered in Pratteln, Switzerland, the company operates a highly integrated, customer-focused platform that delivers specialized performance and color solutions in more than 100 countries.
Heike VAN DE KERKHOF — who has more than 30 years of experience in the chemicals, oil, gas and materials industries — is the Chief Executive Officer (CEO) of Archroma. Previously she served in many globally leading companies with a true passion for innovation, sustainability, performance, mentoring, diversity and inclusion. Heike van de Kerkhof also holds a non-executive board role at OCI N.V. and since Jan 2021 at Venator Materials PLC.
Recently Tareq Amin, Editor and Founder, Textile Today has met Heike VAN DE KERKHOF, Chief Executive Officer (CEO), Archroma to learn more about Archroma and its products and services.
Textile Today: You have taken over the CEO position in such a vulnerable Covid-19 period. How you have managed this situation as Archroma has operations in more than 35 countries?
Heike VAN DE KERKHOF: I joined two and a half years ago in 2020. I feel very privileged to lead one of the biggest textile chemical companies globally. I am a textile engineer and I have a mixed career journey before joining here and it has been a privilege to serve in the industry. I am happy to play a vital part in transforming the textile industry.
As there are environmental, social and governance (ESG) trend for eliminating pollution, and awareness building among consumers, I hope Archroma – can intensify these efforts and bring more knowledge to the consumers about responsible dyes and chemicals, about recycling – it is also regarding how difficult it is to recycle a garment.
Textile Today: Archroma acquired Huntsman Textile Effects which is a milestone for the chemical industry as both are the founding members of Sustainable Chemistry for the Textile Industry (SCTI). So, what drives Archroma to take this gigantic decision, and what will be the impact on Archroma’s business portfolio?
Heike VAN DE KERKHOF: I must tell you that the most important aspect of a company is its heritage. As a company, Archroma has 125 years of heritage. Over the years we have had a lot of strategic acquisitions like BASF’s global textile chemicals business, Dohmen – a specialist in automotive dyes– that brought Archroma into the automotive textile chemicals business, a very crucial business for us.
If I look at Huntsman Textile Effects it has a very good textile heritage. We are two very good companies coming together – both companies are known for sustainability and innovation. Archroma and Huntsman Textile Effects have both heavily invested in R&D and innovation. As a result, both of us have brought state-of-the-art, moresustainable products like Archroma’s Aniline-free Diresul® Pure Indigo for denim. That is vital for balanced ecology, because, if Aniline for instance is released into the wastewater, some species die. We have therefore built a dedicated plant for this. This is one of our ground-breaking initiative to clean the denim industry and make it fully sustainable. We also have our EarthColors® – we are proud that this more sustainable dye is made from agricultural waste.
Here in Bangladesh’s headquarter in Dhaka, you can see all these innovative and more sustainable products.
Textile Today: When Archroma has such a massive portfolio of products – it is challenging to position these in the market. Besides, you have come up with an innovative solution such as the ‘Archroma Way’ model. After the acquisition of Huntsman Textile Effects, as the CEO of Archroma, how do you see the new shape and business portfolio in the coming days?
Heike VAN DE KERKHOF: I call it a merger of equals because we complement each other. Archroma is stronger in chemicals than in dyes, whereas, for Huntsman, its textile effects business in dyes is stronger. We can bring to the global customers the full i.e. end-to-end range of textile dyes and chemical products. That is crucial for us.
I think we pride ourselves at Archroma as not product sellers – rather system sellers. What this means is that with our DEEP DIVE system color book, for instance, customers can take a deep shade and they will be guided on how to make that shade in terms of pre-treatment in knit fabrics.
We also offer all kinds of after-chemical treatments that the textile industry has been demanding. Inr athletic wear, for instance, the industry would demand bacteria control for medical applications. Also, parents prefer a softed touch for the articles they buy for their kids and themselves. On top of that, as people are starting going to the office again, there is a demand for non-iron shirt chemical ranges. So it is crucial that we keep on investing and developing in these areas.
Textile Today: How Archroma is equaling the strengths of two equal giants and competing within itself to come up with better solutions in the coming days?
Heike VAN DE KERKHOF: I think the most important asset of any company is its people, the dedicated employees who come to the office every day and make a difference for the customers. I feel that Archroma is one of the most customer-centric companies, and I also see it in the textile effects division of Huntsman. This will tremendously aid us in talking to the decision-makers in the big brands.
There is a belief, given the new unstable global situation – high inflation, a potential recession, the Russia-Ukraine scenario and other conflicts – that brands need a one-stop shop to shorten the supply chain cycles. And I think we can do this – for instance we can provide color swatches and recipes ready to use in the production of the garment, which can make. the supply chain faster. Such customer-centric solutions will bring us to the table when decisions are made in the future.
The value proposition for textile mills is also crucial. As mills face higher energy costs, order costs, CO2 footprint, and treating the wastewater, we are their partner of choice to help them. With Archroma’s system selling, we can bring down the energy usage down, water consumption down. Also, we can assist textile mills in bringing down the CO2 footprint, and lessening the wastewater.
We believe that this supplier-manufacturer collaboration model is the future.
Textile Today: We are observing the impact of the Russia-Ukraine war on the apparel business. Already the price is increasing and how it is affecting the manufacturers, and you also rightly mentioned the challenges of resource utilization by the manufacturers. On top of it, another challenge is the increasing cost of products and raw materials prices. How do you evaluate this situation from Bangladesh’s perspective as Bangladesh’s most of the buyers are EU based?
Heike VAN DE KERKHOF: First of all when you look at the total cost of a garment, the most expensive part is the raw material. And you see that the cotton prices have increased up to 80% last year, which translated into a trend that more and more polyester and blends are being used. The textile chemical supplies only represent 5% to 20% of the total cost of a garment, a very small portion of the total cost of a garment.
That means the mill partners and also the brand partners can get innovations from us, because we are investing in innovation and R&D, and to some extent we can mitigate the increased cost aspect through other savings in the application process.
Textile Today: As you have mentioned about the fiber blend and yarn trend – from this aspect, the EU has been drafting new regulations on fast fashion and urging more steps toward circular fashion, product life cycle should be increased. In this aspect, dyestuff and chemical solution providers have a bigger role to play. Kindly elaborate on the aspect of providing such a solution that will help in increasing the life cycle of a garment.
Heike VAN DE KERKHOF: Archroma’s DEEP DIVE is a complete system for maximum coloration efficiency with enhanced fastness, and dramatically reduced use of water, chemicals and energy. It ensures less fiber damage thus increasing the life cycle of a garment.
Whereas, it is the opposite with EarthColors® which display some fading overtime as these dyes are made from plant waste. Ultimately the color will fade, and consumers can be explained why and accept that as a new trend. And the future trend is going to be like this – fashion lovers are often wearing their faded garments and showing them to the world.
The other thing we focus on is recycling, because we would like to pre-treat fabrics and provide dyes for recycled fabrics. Most importantly, in my opinion, we need intense social media education regarding sustainability awareness among consumers, and help them understand the difficulties and challenges of recycling a garment made from blended fabrics.
Overall, we must try and influence the buying trends of consumers, and push them to start demanding more and more sustainable apparel.
In the future fashion trend, the global population is going to multiply and cotton cultivation has a direct impact on food crop cultivation. This is why we will see more adaption of blends and man-made fiber (MMF). I think the consumers need to understand that they have to pay more to wear cotton-made products as they will be more scarce in the future.
Textile Today: Bangladeshi manufacturers are now moving from cotton to synthetic garments gradually and it will increase. What do you think?
Heike VAN DE KERKHOF: I have a special interest in assisting the Bangladesh textile industry to grow, as most of the global brands are sourcing from here. Over-dependence on China is coming to an end.
I belong to the Swiss-Bangladesh Chamber of Commerce (SBCCI). I gave a keynote speech on Bangladesh in Geneva where I highlighted that Archroma is one of the most preferred companies in the Bangladesh textile industry,especially for military applications as color fastness is a top requirement
As part of more investment,we are considering to open a small-scale production site in Bangladesh. We are hoping that by the end of 2023, we will be able to get everything finalized and take a decision on the manufacturing plant.
I am delighted that Archroma is the partner of choice for the Bangladesh textile mills and for the brands who are sourcing from here.
Textile Today: Once again the global markets – especially the USA and the EU market – iare observing some declines in fashion consumption due to uncertain scenario. How do you see the coming days?
Heike VAN DE KERKHOF: I looked at my company and see how we can adapt to uncertain global situationslike the 2008 crisis and then the COVID period. Now we see high inflation and a potential recession situation, butut I am very confident that we as a textile industry will prevail.
And soon, the brands will place more orders as consumers will not accept only a limited amount of collection year-round. Similarly, amid all the talks of global warming – there will be some parts of the world where it will have a winter scenario.
Textile Today: As we know Archroma is an innovation and R&D-based company. What innovative solutions is Archroma offering for the factories to be more water and energy efficient?
Heike VAN DE KERKHOF: I think in today’s environment, end-to-end textile chemical solution providers are more needed than the manufacturers who are providing niche products. For example, we have to have the mindset of providing 80% of the world’s denim as Aniline free rather than the current only 5 to 10%. And the big brands have to commit themselves to come up and offer Aniline-free denim. This will revolutionize the denim industry, and we are willing to increase production sites for that.
I think the other example is our system selling approach. I think there is an art in system selling, and Archroma is very unique with its approach. We started with the idea in the end of 2018. In the fiscal year 2021, we already witnessed a 42% sales growth based on system selling.
When you will give a textile mill the complete range from pre-treatments to after-treatment chemicals and dyes. That guarantees a certain level of quality and technical specifications and gives them reductions in energy, water and other overhead costs, showing how our products can simultaneously increase sustainability and decrease energy and other costs. Currently, we have launched 80 systems.
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