A Schulman
Interplas 2014. Three days of meetings, networking, high-tech demonstrations and headline-grabbing announcements. But amid this hubbub of frenetic activity, EPPM took the time to sit down and catch up on the A. Schulman booth with Vice-President and General Manager, EMEA, Heinrich Lingnau, External Communications Manager, EMEA, Annamaija Bergius and European Commercial Director at Perrite - which was acquired by A. Schulman in 2013 - David Hall.
Lingnau revealed that 2014 has been a good year for A. Schulman despite the ongoing difficulties shrouding the European economy, and the results will be clear when the company publishes its end-of-year financial results this month.
"Business is doing very well. We have growing earnings and the first three quarters of the year were very good, with the fourth quarter looking good too so the numbers are going in the right direction.
"We've seen some softening in some countries in Europe. Southern Europe is still not really growing at this point but we see signs in Spain of stabilisataion. The German economy was not doing as well over the last month and we hear uncertainty from some of our customers. But we'll see. At the moment it’s ok."
Lingnau is realistic about the state of growth in Europe - unlike the burgeoning economies of Asia and the Middle East that are reaching maturity, Europe's population is not growing and industrial production is generally lingering at between 10 and 15 per cent below what it was before the global economic crisis of 2008. As Lingnau says, it's "a challenging market".
Nevertheless the plastic compounds and resins specialist recognises which markets are recovering faster than others and one of those is automotive - but even then there is a caveat.
"There's success in the car industry," said Lingnau, "but then it's only really on the two ends of the market. Luxury cars like Mercedes and Audi for example have seen an increase and the lower end is doing very, very well. Not so much in the middle."
The growth of the luxury automotive sector is being boosted by the increased wealth of the Asian markets, in particular China, but Lingnau remarked that even China's growth is slowing.
Hall commented: "I can mirror that as well, you see it in the premium automotive sector you see it from the Warrington site, namely Jaguar Land Rover. In the lower segments, Nissan's significantly invested in Sunderland and they're bringing new vehicles in and Honda Swindon will now be responsible for the Honda Civic for the US market."
"We're seeing very exciting growth in automotive for the premium segments," he added. "Three years ago we even surpassed 2007 [in terms of growth] and we continue the same trend lines since then -that's a great reason why A. Schulman bought the business."
Driver of innovation
Indeed, A. Schulman is a business on the rise with numerous successful acquisitions peppering its already illustrious timeline and paving the way for expansion on an international scale.
"Growth is really what we want to drive, said Lingnau, "and we try to do this through organic initiatives, by improving services to our customers and to try to help our customers to identify with the product. We are very much connected to our customers and they have the same concerns about how can they grow in an economic environment in Europe that's not very dynamic. We see a lot of opportunities and ideas - how can they improve their products and services, how can they bring new products that are more appealing to the consumer. Lots of things are happening in automotive, agriculture and packaging where many people have great ideas.
"We see Europe really as a driver of innovation. Our customers can survive very well if they come up with new products and new ideas."
A. Schulman chooses its acquisition ventures carefully and Lingnau believes Warrington-based Perrite in the UK and Jackdaw Polymers in L'Arbresle, France, are the key to the company's ongoing success in plastics and in the wider manufacturing sector, "complementing A. Schulman's offering".
"We do believe in having a strong local footprint," Lingnau stated. "That's what we need to be local and close to our customers. Our engagement with Perrite further strengthens our presence in the UK and that was the right decision. Two months ago we made another acquisition with the plastics edition of Ferro (the company’s Specialty Plastics business segment). They have manufacturing plants including ones in Spain and for us it's a very good acquisition because we didn't have a plant in Spain before and it's one of the biggest plastics markets in Europe. So now we have a strong footprint in the Iberian peninsula and we believe this is very, very good. And after two months with Schulman they're doing very well and we see lots of synergies."
Lingnau explained that in order to grow, A. Schulman needs to continue developing its own strengths, but acquisition is an important part of the business's growth strategy.
"This week and in two weeks at Fakuma we will be launching new products for packaging, building and construction applying to new legal standards of halogen-free, HBCD-free, environmentally friendly comppunds to be used in conversion - so yes we'll have some some news on that soon."
Show dynamics
Lingnau, Hall and Bergius were positive about their Interplas 2014 experience, but activities next door at additive manufacturing-centred TCT Show had not gone unnoticed.
"For me," Lingnau said, "it was very good to be at Interplas and we've had many business leads, good discussions, many of our customers are here or are coming tomorrow [October 2nd], so we are glad to be here and glad to have our combined teams here showing out three strong activities. Perrite is demonstrating engineering plastics, we have masterbatch activities and we have powders. It's a very good combination to have."
Hall echoed Lingnau's sentiments. "For us at Interplas it's the ideal platform to launch the Schulman business in the UK," he said. "Perrite has a long association with the UK and we're a major player within engineering plastics and having the name A Schulman as well for all of the different business units this was perfect timing. We've just celebrated our one-year anniversary in fact - happy families - so the timing was good."
"TCT Show is interesting too," said Lingnau. "There is crossover [with 3D printing]. They need plastics too."
So does additive manufacturing have a role to play in A. Schulman's growth strategy into 2015? Lingnau was in no doubt.
"Is additive manufacturing an avenue? Definitely! We believe we can grow in that area and contribute. It's a very exciting market. Lots of things happening and we are developing our position in that market and many new companies and new ideas are coming out every year. We saw it last year with Arburg; lots of new ideas and dynamics. It’s still very small but it has a good pace of growth."
