Huntsman being the global leader in textile chemical manufacturing and supplying, serving for Bangladeshi industry by providing technologies for fulfilling latest demand of the fashion world. At the same time the company has been introducing number of game changing technologies in many segments of textile wet processing. After the acquisition of Ciba, Huntsman has become leading global innovation forwarder in this business value chain. BTT has been covering an exclusive interview session with the high ups of the company. In the previous issue they were talking about supply chain strategies related to Bangladesh and their recent developments in cotton and polyester processing. Previous part also covered very interesting elaboration and update on environment friendly processing, water free dyeing and digital printing. Further in discussion we could dig out more ins & outs of techno trade strategies of the company. To remind you reader, we have been talking to Mr. Kent Kvaal, Vice President, Sales & Technical Resources, Huntsman Textile Effect (HTE) and Mr. Steve Gray, Vice President, Strategic Marketing & Planning, HTE. Herewith the conversion continues from the first part…
Some of the best innovations in textile start off from other industries….
BTT: Let’s move to general information on Research & Development (R&D) and how it is being done in Huntsman?
Mr. Steve Gray, Vice President, Strategic Marketing & Planning, Huntsman Textile Effect
Steve: As Kent said we have pretty focused R&D. We have two types of people dealing with textile application related help from our organizations technical group. One is in Kent’s area, so this includes technical service laboratories and technical application laboratories; we have many of these around the world. These laboratories help us to solve day to day problems for customers, introduce new products to the customers and support them in other application oriented problem solving.
In addition to that we have dedicated research laboratories. We have four of those. We have one in Basel, Switzerland, one in Germany, one in Mumbai, India and another one in Panyu in China. We have some exciting changes going there right now. Because the growth we see in this region, we are expanding our capabilities in South Asia in our Mumbai Branch. These R&D facilities are focused on major global projects; these developments go around the world.
In addition to that we can do rapid formulation changes for specific local customers, the Formulation & Distribution Centers (FDCs), we were talking about, can manage those necessary customization. But we need to have critical mass of people for research, and that’s why for core research we work in those four facilities only. As our growth area is South Asia now. We are in process to open our new R&D center in Mumbai. It is a great place because we will have all the three divisions working together. So all the Huntsman divisions Kent mentioned before will be present in this new facility and this will be completed by the beginning of the next year. We are excited to bring our core research facilities here in South Asia.
BTT: Your entire R&D is being done fully within your organization or you go for partnerships with others?
Steve: We have many partnerships. Our most established and long lasting one is with Dupont on the fluro chemicals side and we have joint research activities there. We have lots of activities, some with academic organizations and some with commercial organizations. It depends on research area. What we are always interested in, is new technologies.
The other divisions within Huntsman are slightly different; they are built around core technologies. For example our polyurethane division is focused in polyurethane only and they serve many different parties. We (HTE) are different; we serve one industry which is textile. Our dedication, our focus and we have lots of enhanced innovations as you heard, but we are looking for innovations in other industries as well. We think this is very important because some of the best innovations in textile start off from other industries. So with the example of fluro chemicals or silicones this started life outside textiles but now is major technologies within textiles. So it is important for us within Huntsman that we have co operations and partnerships and look at what’s going on even if it is academic institutions or whether it is with commercial institutions to bring new technologies in. But it has to fit with our customers’ requirements. We are happy to put our effort to develop technologies or if we can see an opportunity to acquire finished technologies we try to grab those opportunities. I think you know we have this technology development with enzymes with Genecore who now also partnering with Dupont. So we are open to any kind of new technologies which drive in our general direction. Now our R&D does lots to focus on environmentally friendly developments to bring value to our customers not only in effects but also in water and energy consumptions. So that’s our overriding drive, half of our development somehow related to environmental sustainability and we have in house capabilities and always more than happy always to partnering with others to bring results as well. So it is a joint method.
BTT: How many patents you are keeping and how do you manage those?
Mr. Kent Kvaal, Vice President, Sales & Technical Resources, Huntsman Textile Effect
Steve: We have over 1000 patents. We keep it around at this figure. We are keeping even patents older than 25 years. In particular in Europe the older the patent the costlier it is to maintain. So our biggest expanse in last few years was patents. So, in keeping patent we need to do business judgments call. Also in some cases you disclose more in the patent application than what you protect. Brand new products to old products always we have to take critical decision on the business case of patent protection. We have three areas in patents; we have technology patent, formulation patent & application patent. Keeping the portfolio of value a patent provides against the cost of it is important for us.
BTT: You know there is a road map for Zero Discharge to Hazardous Chemical (ZDHC). What is the latest progress over there?
Steve: What we are excited about is to support those brads & retailers to achieve the target. I think you know that the key focus is to comply with ‘Greenpeace’ campaign but the principle objective is to eliminate toxic substances from value chain, which is a great initiative. Here we can play a great role by separating out fact from fiction and replace some emotion with science based facts. And that’s what we see our part to play in this process. We have been invited by brands & retailers to help designing the version 2 of the roadmap. New approach is being introduced in this version where the brands & retailers are looking for the best way to reach the goal. We are happy and proud to work in these groups in helping them what technology to look at. For example moving to C8 from C4 chemicals, in our partnership with Dupont we will address this issue. We already have developed some alternatives for some hazardous chemicals. So, we echo with the commitment of ZDHC and trying to help brands, retailers & our customers to reach the goal.
BTT: Do you think it is possible by 2020?
Steve: I think each brands and retailers has to have their own judgment call. Are there are technologies available that allow them to do that? It depends on the technical aspects. Each brand has to review their expected performance from the products and reviews what are the technologies available to make those performances. So it will require some change around. We know that the brands and retailers have their ‘restricted substances list’ (RSL). And this is a challenge and problem for our customers to figure out so many of such lists (buyer & destination specific) available in the industry. So, we propose a ‘positive list’ (PL). The list is in our website and in H&M website. So, now it is easier now to select right products for conforming ZDHC requirements. Hence, I can conclude that yes we can achieve the target, only we have to match our fabric performance requirements with the existing conforming products performance.
BTT: Usually brands have to look at consumer demand in designing products rather than looking at RSL or PL.
Steve: When we have done consumer studies before, we realized that we have important parts to plays in which are communication and education. Because consumers get confused about things and they also get miss messages. And also people forget that polyester, dyes, cellulose (cotton) these are also chemicals! So it’s not avoiding chemicals rather restricting the hazardous chemicals. And we must separate out facts from fiction. So as a whole we should rethink the chemical and accordingly educate the value chain. We also should remember that it is not only for the substances (chemicals) themselves but it is for environmental footprint, water and energy consumption are causing greater impact than the dyes & chemicals present on the article. And so we are working hand in hand with our customers in our Productivity Improvement Program (PIP) process and giving solutions for improved environmental performances.
Kent: From consumers’ perspective, the idea of sustainability is real, it is growing and so it is the true trend where industry needs responses. Many of our customers don’t see it as a threat but as an opportunity. And they are adapting options that reduces environment footprint and at the end of the day their business is more profitable more sustainable. And that’s how we Huntsman see this issue. We are offering environment friendly products and tools for better future. But for the roadmaps like ZDHC if the consumers, retailers, brands, designers find any gap, that’s the area for Huntsman to work on at the research and development. That’s why we invest 5% of our revenue in R&D for making sure necessary innovations for closing those gaps.
BTT: Under the Productivity Improvement Program (PIP), we have seen a strategic partnership program with DBL, how was the success of that? Are you going for more of such partnership?
Kent: DBL is a great company to work with in PIP project. PIP focuses on process optimization for productivity improvement and at the end it increases sustainability. We have got some exciting results. And so we are keen to have more of such partnerships. Such initiatives require proper expertise and their given time in the factory for the improvement as capital investment. We hope more and more companies would come forward and we can contribute more in improving environment here in Bangladesh.
BTT: How many ‘preferred customers’ now you have? What are the key advantages they get?
Kent: Well, we don’t publicize who and how many preferred customers we have. What I can tell you is, we have over 10000 customers worldwide. Selection criteria for preferred customers include many things like business volume, market positioning, willingness to be different from others, adeptness towards implementing innovation, process optimizations techniques etc. Those customers may be our customers for next 10 years and more. We invest in them training and capacity building for adapting new technologies and processes. There are three key advantages preferred customers receives. One is sustainability, another is increased operational efficiency or drive down per kilogram of fibre/fabric processing cost and finally product differentiation. They enjoy the benefits of selecting the series of dyes & chemicals that helps maximizing productivity, maximizing right fast time (RFT), minimizing energy consumption, water consumption & chemical consumption. Optimized process doesn’t only give you 5-10% dyes & chemicals saving but provides much more benefits from other resource consumption areas.
BTT: What do you mean by ‘product differentiation’?
Kent: We can see that most of the manufacturers in Bangladesh are volume producer. For them it is important now to focus more on value added products by product differentiation. We are working a lot on developments to bring innovations providing some added end benefits to the products of our preferred customers. We do privatized innovation for brands and retailers as well. Product Differentiation would help in value addition imparting added end performance.
BTT: Can you compare your business in technical textiles & traditional textiles.
Kent: Two third of our business is from traditional textiles and other one third is from technical textiles. And importance is also proportional to the revenue weightage percentage. Main market for technical textile is the west. But the growth of technical textiles in Asia is much higher than traditional textiles.
Steve: Automotive being a core of our business, we see a very rapid growth in Asia, especially in Japan. Comparing to US and Europe, we see market is growing very rapidly in Asia. We are providing specialized solution as per the demand of the Asian cars.
Nonwoven is another important business for us. Although number of customers are less but it is a big and important part for us. And growth rate of these business are very high.