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January 13, 2020 09:10 AM

ContiTech's Guy Enta: Hose industry changing quickly

Bruce Meyer
Rubber & Plastics News
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    Bruce Meyer, Rubber & Plastics News
    Guy Enta of ContiTech touched on a wide range of topics during his keynote address at the Hose Manufacturers Conference.

    Cuyahoga Falls, Ohio — Guy Enta has seen a lot of changes during his 33 years in the rubber business, and he thinks the hose industry will evolve even faster over the next decade or so.

    The vice president and head of Continental A.G.'s Americas region for the ContiTech Industrial Fluid Solutions business touched on a number of the changes he has seen — and expects to see — in the hose sector during a wide ranging keynote address at the recent Hose Manufacturers Conference in Cuyahoga Falls, Ohio.

    Among the topics he touched on are the impact of automotive trends and the increasing use of plastics in hose; changes in how the Internet has impacted the industrial world; and the future of connectivity.

    "We've all seen a lot of changes, but I see a lot of changes coming," Enta said. "The good news is I think the hose business will always be there and always be viable, and I think if you can adapt with technology to those changes, you not only can survive but you can thrive in the business."

    From a product standpoint, looking at automotive engine compartments, temperatures are higher, the need for fuel efficiency is greater and the desire to make products more environmentally friendly have driven changes in materials. In his time in the industry, he said he's seen four compound changes, from nitrile/neoprene to epichlorohydrin elastomers and chloroprene, and now to Vamac fluoroelastomers.

    Talking about electric vehicle technology, Enta said the engine compartment has more room, but there actually may be more opportunities for hose. His colleagues in the mobile fluid systems unit at Conti showed him one assembly used for cooling in a hybrid vehicle that had a hose that was more than 4 meters long.

    The shifting of the automotive industry away from internal combustion engines to EVs also will have other, less obvious consequences. For example, the ContiTech exec said his firm sells a lot of gas pump hose, with one factory having a third of its volume in the product. He said he doesn't know how many gas stations there will be in North America 20 years from now, but there are likely to be fewer.

    "Right away we see impact," Enta said. "Twenty years from now or 10 years from now, one of the quickest ways to not be successful in business is to get an increasing share of a decreasing market."

    There also are more plastics being used in automotive, and he said that will have a spillover effect into industrial applications. "Automotive drives volume, volume drives technology and technology invariably spills over into the industrial side of our business," Enta said.

    ContiTech has invested close to $10 million in production of plastics hose at its U.S. manufacturing facilities and also recently closed on the purchase of the flexible hose business of Daverio, Italy-based Merlett Group for an undisclosed amount.

    Technology for plastics hoses is more advanced on the automotive side, whereas he said in industrial the products have slightly less temperature resistance than needed on the high end, and are slightly more stiff than hoped for on the cold temperature side of the business.

    "Once plastic technology can cross those limits, I think it offers a huge cost advantage," Enta said. "I also think it offers a huge weight advantage and it offers a huge processing advantage because you don't have to cure it. And you have the potential to come up with the first recyclable hose."

    Business changes

    The other technology change to impact the industrial business marketplace in a major way has been the transition of the Internet from a place to get information to a place to actually do commerce, according to the ContiTech vice president. Even five or so years back, the expectation was Internet sites like Amazon and Alibaba.com would be a major force in consumer markets, but not in industrial sectors.

    That's no longer the case, he said, particularly on the industrial and hydraulics side of the business. "What I see is the relationship with our customers is important, and I think it always will be, but we've crossed the line where it's not as important as being fast and being efficient with those customers," Enta said. "So speed now officially trumps relationship."

    Enta told the sales staff to ditch the sales pitch, because at the click of a mouse, a customer can check the specification for any given hose and find the price in any market around the world.

    "You guys really need to focus on explaining the value you bring to our customers for that solution," he said. "Because if you can't do that and you can't do that simply, then get ready for the next question, and that question is 'What's your price?' "

    Mergers and acquisitions also have played a key role in the changing customer landscape within the industrial distribution arena, according to Enta. There are three independent power houses in the industrial business: Motion Industries, Applied Industrial Technology and Eriks.

    But private equity-driven companies like Sun Source and Singer Equities have by acquisition alone grown to be nearly as powerful as the big three in the industrial marketplace, he said. An official at Singer told Enta the firm had made six acquisitions in the last seven months and has another dozen in the planning stages.

    That means these suppliers have grown large enough to demand their own portals and supplier metrics. The ContiTech official said the firm now has to deal with all these different customer bases.

    "Our secret for Continental is to make sure we get what we call a digital blueprint for all of our products and services that cover any possible field of information any of those suppliers want," Enta said.

    Connectivity

    One question he gets asked a lot is how Conti is doing in the race for the smart hose. To him, the ultimate goal of a smart hose is to have a hose that knows when it's going to fail, reorders itself and the replacement arrives before the first hose fails.

    "I haven't found a manufacturer who is there yet, but one of the things we've come to realize is there is no such thing as a smart hose, there's only such a thing as a smart hose assembly," Enta said.

    More of those assemblies are being crimped, versus having a clamp put on it. ContiTech bought a company called Custom Crimp not because it wanted the assembly machines, he said, but because it felt those machines are "data gold mines."

    Enta said data is an extremely complicated subject. The first thing to understand is that the customer owns the data, so that must be respected. It's also important to be mindful of data laws that vary dramatically from country to country.

    Right now ContiTech is using data to track quality and the number of hose assemblies, but down the road the firm hopes to be able to feed the supply chain information about demand.

    "As data gets more sophisticated, we want to use it to feed our R&D teams to help them come up with the solutions of the future," he said. "We still haven't realized the holy grail to feed product development and feed a seamless supply chain to our customers."

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