NEW YORK (April 4, 11:30 a.m. EDT) — Bayer MaterialScience LLC is reorganized and ready for NPE 2006.
Less than two years after parent firm Bayer AG shuffled the deck of its global plastics and chemicals units, BMS — based in Leverkusen, Germany, with North American headquarters in Pittsburgh — will focus on new products and technologies at the major trade show, set for June 19-23 in Chicago.
At a pre-NPE event Feb. 21 in New York, Greg Babe — BMS president and chief executive officer for North America — highlighted the importance of the area for the firm. Babe, a 26-year Bayer veteran, said the region accounted for 30 percent of total sales for BMS in 2004, or about $3 billion.
In North America, BMS employs 4,000 and operates 12 plants with total capacity of almost 5 billion pounds. Its major plastic products there include polycarbonate, polyurethane and thermoplastic polyurethane. In mid-2004, Bayer separated its ABS unit and other specialty chemical businesses into a separate company, Lanxess AG.
Although Babe said BMS was challenged by higher energy and raw material costs in 2005, they didn't seem to affect the unit's results. BMS global sales grew 24 percent in 2005 to 10.7 billion euros ($12.9 billion) while pretax profit mushroomed 110 percent to 1.4 billion euros ($1.7 billion).
Babe added that BMS has improved on nonfinancial fronts as well, reducing its rate of energy intake by 60 percent since 1992 and its rate of greenhouse gas emissions by the same amount since 1990.
Moving into 2006, Babe said BMS is “optimistic, but it's challenging out there.”
“Seeing what's happened to the Tier 1 and Tier 2 auto suppliers was the big story in 2005 for polycarbonate,” he said.
Automotive ranks third in the BMS product mix, with 15 percent of sales, trailing the construction and electrical/electronic markets, each with 18 percent. But the auto sector has come under intense pressure because of the financial woes suffered by General Motors Corp. and Ford Motor Co.
“In the auto sector, we're concentrating on dealing with Tier 1s and 2s more than [original equipment manufacturers], but it all rolls downhill,” Babe said. “There's a lot of pressure squeeze on raw materials.”
Babe added that BMS “is not as well-positioned as we need to be” with foreign automakers that have plants in North America. But he also pointed out that the Exatec LLC window glazing joint venture between BMS and GE Plastics has received approvals for auto specs other than windshields. The venture also has commercialized its first large-scale applications on the Cadence vehicle.
“We're still driven by innovation, but we're affected by issues surrounding fossil fuels and energy,” Babe said.
The innovation part is the domain of Robert Kumpf, an 18-year Bayer veteran now serving as vice president of future business for BMS. The firm has identified 10 flagship areas for research and development, including nanotechnology, data storage, security and defense.
Overall, BMS spent $400 million on R&D globally in 2005, employing 1,700 people on innovation projects. Products less than 5 years old make up 20 percent of annual sales for BMS, and its R&D staff averages one patent filing per work day.
Kumpf echoed sentiments expressed by other plastics R&D officials by saying BMS now is looking more to refine existing products instead of discovering brand-new polymers.
“We don't expect to announce new polymer backbones,” he said. “But there are still a lot of things we can do.”
New BMS technologies on display at NPE will include Aura color infusion technology, which taps into the trend of mass customization by allowing processors to dip or spray color on a variety of polymers, Kumpf said. The technology has been licensed by three firms: Replex Plastics of Mount Vernon, Ohio; 3form Inc. of Salt Lake City; and Apollo Color Coating LLC of Roseville, Mich.
Bayer also is looking into new holographic data storage that could expand digital storage space greatly. The technology can extend into security, optics and displays as well, said Kumpf.
Nanotechnology “is an enabling technology — it's not a what, it's a how,” he said. BMS is working on several nanotech projects, including some that improve flame-retardant performance.
Automotive R&D at BMS is continuing work on PC glazing of windows for weight savings, safety and styling. The business “is at the beginning of market penetration” with roof modules and fixed side windows, Kumpf said. PU in auto roof applications totaled 1.5 million pounds in 2005, but should reach 37.5 million pounds by 2015.
Bayer execs also are pumped up about zaZen, a concept car that will be on display at NPE. The vehicle, produced by design firm Rinspeed Inc. of Zumikon, Switzerland, features a contoured single-section roof dome made of PC.
Other new BMS products to be featured at NPE are:
* Baytron-brand conductive polymer for E/E applications.
* Baytube-brand multiwall carbon nanotubes for electrical and thermal conductivity and tensile strength. Sample quantities of the product now are in production. They can be blended with plastics in uses such as hockey sticks, where the firm said they can increase flexibility and puck speed.
* Makrofol-brand PC film, which can provide color stability in medical equipment during sterilization.
* A new medical grade of Texin-brand polyether-based TPU, offering moderate stiffness and, according to Bayer, superior toughness.
* A new biocompatible grade of Makrolon-brand PC for medical uses.
* Fantasia-brand color special effects for foodware, audio systems, furniture, CDs and other products.
* Artwalk-brand PU floor coatings for visual, functional and design applications.
On the expansion front, BMS is investing $1.8 billion in Ciaojing, China. PC blending and coating products facilities already are up and running, and a 220 million-pound-capacity PC unit will open there later this year. In 2008, the site's PC capacity will be doubled and production of TPU and PU feedstock methylene diphenyl diisocyanate will be added.
BMS has no major expansion plans for North America, although the firm did add 55 million pounds of PC capacity in mid-2005 through streamlining in Baytown, Texas. North American PC demand grew 5-7 percent in 2005, Babe said, and should grow at a rate of 1½ to two times gross domestic product in the near future.
“We can always improve technology and improve throughput without a major investment [in North America],” he said.