“The customer base is there to support it,” Stothard said, “but it's all in China, Southeast Asia and India. That's where the expansion is targeted. It's not a very sexy product, but it's a vital component.”
The company said these elastomers perform in extreme temperatures and demonstrate excellent resistance to a variety of fluids including synthetic engine oils, transmission fluids and diesel/bio-diesel fuels, used in most advanced autos.
The plan was to fill some of that capacity with newer grades. “It's doing very well,” he said. “We planned for it, and we looked at the automotive totals to make sure that we're not over-planning or under-planning. I think we've done probably about right. We've got three plants worldwide making ACM products, and this is the largest one that we had.”
The continued global uptick in the automotive industry certainly has helped to fuel Zeon's success. Although car sales have rebounded to pre-recession totals, at more than 16 million units, Stothard said the biggest growth—and largest target market—is overseas.
“If you look at China, doubling the size of the automotive market, and now it's much bigger than what you have in North America,” he said. “I think the big growth is elsewhere, whether it's India, Southeast Asia, Brazil or China. Europe is starting to come back now, which is encouraging. But again it still has a long way to go before it gets back to pre-recession days.”
Stothard said Zeon must cater its product to the markets it serves.
“One of the things we like about Europe is you've got small cars going at unbelievable speeds on the Autobahn,” he said. “That's a really good test fact-check for the high performance that is needed all over the world.”
He said the larger North American cars require a different type of technology. “The advances tend to come in Europe first because of those conditions, and then it gets spread all over the place.”
And sometimes the product ends up right where it started. Stothard tells the story of a gasket that ultimately became part of a Ford Explorer.
The rubber for the gasket was made in Louisville, then sent to Germany to be molded into a gasket. From there, the gasket was shipped to Brazil, where the engine was manufactured. Finally, the engine was shipped back to Louisville, where it was installed as part of an Explorer at a Ford assembly plant.
“The rubber had come full circle,” Stothard said.
Another challenge is making a product that can withstand the extremes of the oil and gas sector, in North America and elsewhere. The drilling boom in North Dakota, Pennsylvania and Ohio, known as fracking, requires a different technology than, for example, extracting oil 25 miles under the sea.
“It really is more aggressive, more challenging, and as a result it opens up possibilities for us,” Stothard said.
Specialized nitrile production
The Louisville facility also produces several forms of nitrile, including liquid nitrile, powdered nitrile and pelletized nitrile.
The product is used in such specialized applications as in adhesives that keep the blades of a helicopter together. And much of the product is consumed in the U.S.
“Most nitrile plants all over the world are large, general purpose plants that they can just churn out product,” Stothard said. “This is more suited to small applications, very technical applications that we can make some money on. It's a tough market.”
Zeon has two other U.S. manufacturing facilities. Its Hattiesburg, Miss., plant specializes in polyepichlorohydrin elastomers, a low-temperature product used extensively in the automobile industry, while the Bayport, Texas, facility makes hydrogenated nitrile, a durable, abrasion-resistant rubber.
Stothard helps to oversee the research and development unit in the U.S., which is stationed across the street from the manufacturing facility. He said it is essential that all R&D units stay in constant communication, no matter if they are working on regional or global projects.
“At one time, it was difficult to get all of those together to make sure that we were making the right decisions, but we've got astute at doing that,” he said. “We've got Americans and Europeans and Japanese in the same room collaborating to make sure we're working on the right things, and they'll be a payback in the future.”
