Fairlawn, Ohio — Materials maker A. Schulman Inc. is seeking growth via new products and a new sales approach.
The new products include plastic composites, which did especially well for the Fairlawn-based company in the first half of its current fiscal year. Global sales of engineered composites grew 6.5 percent in that six-month period.
Schulman makes its composites at 10 global production sites. The firm is adding capacity in Hamburg, Germany, and in June will open a composites innovation center at its production site in Bay City, Mich., executive Frank Roederer said in a recent interview in Fairlawn.
"We're seeing growth in both SMC [sheet molded compound] and BMC [bulk molded compound] materials," said Roederer, who serves as senior vice president and general manager of engineered composites. "There's a lot going on in automotive and in traditional plastics applications like electrical/electronic, agriculture, heavy machinery and sports and leisure."
In aerospace applications, Schulman's composites can offer weight reduction and corrosion resistance as a metal replacement. The materials' dielectric properties also make them a good fit for electrical applications such as circuit breaker housings, Roederer explained.
The innovation center in Bay City will include new machinery and equipment and will allow Schulman to take advantage of having an engineering staff for its composites close to Detroit, the hub of the U.S. auto industry.
"Customers are interested in new products now," Roederer said. "New vehicle platforms for 2020 will have semi-structural parts. There's a rich pipeline focused on what we want to do. The auto market is almost obsessed with reducing weight."
The new sales approach comes soon after the hiring of Gary Phillips as Schulman's first-ever chief commercial officer. Most of Phillips' career experience is in the telecommunications field.
"This is a new position, so it's a challenge, and I've been learning as fast as I can," Phillips said in Fairlawn. "I've been looking at the overall process of how we sell and what our customer experience has been like.
"This is an incredibly complex market. The challenge becomes how to teach sales to do things differently," he added. "We've said that this year is a reset year, which gives us an opportunity to get closer to our customers."
The "reset year" described by Schulman officials for fiscal 2017 is the result of the company working to overcome financial shortfalls caused by its $800 million purchase of Citadel Plastics. Schulman is seeking damages from Citadel's former owners over faulty product data.
As part of this new approach, Schulman has consolidated seven business units into two product families.
"The number of acquisitions that we had made had a cultural effect," Phillips explained. "We could have five [sales] reps at one customer. Now we've got one rep without losing depth at the technical level.
"Some customers have come back to us and said that we're now simpler to deal with because there's less complexity," he added.
Elsewhere in new Schulman materials, Roederer said that the firm's Polybatch-brand EasyPour additive concentrates could benefit from large amounts of new polyethylene resin capacity that are being added in North America. The materials are designed to improve liquid dispensing from stand-up pouches and similar packaging formats. "That's a heavy polyethylene, polypropylene type market," he added.
Schulman also recently partnered with three natural gas businesses to develop and produce a low-pressure natural gas storage tank for motor vehicles. A finished prototype likely is another two years away, Roederer said, but he added the concept is "a game-changing technology."
In Stryker, Ohio, Schulman has worked to make its distribution network more efficient by repurposing a former materials production site as a distribution center. The site includes a rail siding and allows Schulman to do "bulk to box to bag" loading, Roederer said.
Schulman posted sales of $2.5 billion in its 2016 fiscal year. The firm ranks as a leading compounder and concentrates maker in both North America and Europe, and as one of Europe's leading resin distributors as well.
