Performance Additives started the effort in conjunction with its Chinese supplier Shandong Rike — virtually all CPE is produced in China — building a new facility that added 250 million pounds of annual CPE capacity, bringing its total to more than 400 million pounds.
Brian Sample, Performance Additives technical director, has visited the new factory and said it is an impressive operation, with a focus not only on making a quality product, but also in meeting tightening environmental standards in China.
"It has state-of-the-art wastewater treatment containment handled in-house built into the system," Sample said. "It's all automated and very high tech. With the plant being new, they have the latest and greatest controls and technology."
Some of the distributor's customers that have an international presence also have sent representatives to audit the Shandong Rike facility. "That has come back good for us, and has been some of the places where we've been able to pick up business," Vanderpool said.
The company's key selling points in trying to get customers to buy from Performance Additives, he added, include not only the environmental practices put in place by Shandong Rike, but the need for customers to have security of supply and the technical support the distributor can provide from its laboratory in Johnson City, Tenn.
Performance Additives was founded in 2005 by Art Van Nostrand, a former president of additives for the U.S. operation of Arkema. At the time, complete focus was on sourcing additives for polyvinyl chloride. Along the way, the firm got involved with Shandong Rike, which produces process aids along with CPE. As the Chinese suppler grew and expanded capacity, Performance Additives knew that only so much CPE could go into the plastics side, which Vanderpool estimates accounts for 70 percent of the material's volume.
"If we wanted to grow, we needed to get into the rubber industry," he said. "That's kind of been our goal for the past three years."
As that effort began, Vanderpool said the peace of mind brought by having supply security — including having an alternative supplier — was at the top of its sales pitch. Performance Additives generally keeps roughly four months of material in the supply chain at any one time, including two months at its five warehouses, one month supply in each customer's inventory and one month in transit being shipped from Shandong Rike.
Thus far, about 80 percent of the business Performance Additives has gained for CPE elastomers is from existing players, while 20 percent is for new projects. Vanderpool and Sample would like to see the latter number rise as time goes by.
Performance Additives looks to work closely with customers to make sure its CPE elastomers work properly in their applications. That is needed, Sample said, because sometimes a material grade that works fine in Asia—whether due to processing technology or end-product requirements — won't perform properly in the U.S. market.
"What we're willing to do is tailor these products to make sure they fit into the U.S. market, whether that means tailor the physical properties of the product itself, or tailor the packaging or the way it's loaded into the system," he said. "We're willing to make the products more U.S.-appropriate."
That's where the lab in Johnson City is a key attribute. Sample called it a functional lab that doesn't have some of the advanced analytical chemistry tools — Shandong Rike's R&D team helps out there — but does have proper milling equipment that provides "basic testing for a first pass to give customers a confidence level prior to bringing materials into their labs."
"Then they can take it into their lab and evaluate it as they see fit," Sample said. "If there's any adjustments that need made, we can go back and make those adjustments. And if they're willing to allow us to come on-site, we're always more than happy to do that as well."
COVID-19 impacts development
While Performance Additives would like to work with customers on sourcing its CPE elastomers into new materials, the coronavirus pandemic has quieted work on that front for the time being.
"I think most people will tell you that COVID-19 has made things tough from a developmental standpoint," Vanderpool said. "If you're in with your customers, they're usually sticking with you, but right now you're not getting any additional work at new places. They're focused on production and, frankly, keeping people out of the plant as much as they can, just from a safety standpoint."
In addition, R&D managers who might have spent five to six days a week on-site prior to the pandemic may be working from home more, perhaps spending just two to three days a week at the facility.
"So their demand needs go toward things that are helping immediate production as opposed to some of the supply chain issues that we're trying to solve," he said. "We still have a few projects that are active, but right now the focus of the R&D projects is working with customers as they're trying to replace competitive product, making sure that our product drops in smoothly and doesn't put any strains on production."
Sample said the pandemic has changed the way Performance Additives approaches the market, and that they respect customers' needs to keep their workers safe and healthy. The staff has learned to do more with Zoom, email and phone calls, and the firm's lab is still functioning and able to do first-pass screening and evaluate new products.
What has slowed down, he said, is development work by customers, because in many industry sectors business remains strong. "Businesses are producing, so they're not developing as much because they're busy making products," the firm's technical director said. "That's a good thing, but it does typically slow down the development process when that happens."
There does seem to be some moves toward a return to normalcy, according to Sample, noting that some of Performance Additives' roughly 15-person staff resumed some limited business travel in early September.
The distributor has had a good response from potential customers in the time it has been trying to break into the rubber side of CPE.
"From 2018 to 2019, we doubled the amount of CPE imports overall, and that's largely due to our focus on the rubber industry," Vanderpool said.
To supplement its offerings to rubber-related customers, Performance Additives also signed on with Synchemer Co. Ltd. to sell its line of antioxidants, UV absorbers, light stabilizers, nucleating agents/clarifiers, optical brighteners and flame retardants.
"A lot of times those are lower-volume products, but if you are bringing in a truck of CPE and you can put some of these products in the back of the truck, it's just one more service we can provide."
Vanderpool estimated Performance Additives holds about a 35-percent share of CPE in the U.S. for the plastics side of the business, and has high hopes for the rubber side as well.
"We have the largest producer in the world, we have top quality, and we're storing it here in the states," he said. "We think we should have at least 50 percent of the market share. That's kind of our goal."
With Lianda having a market share for CPE rubber-related sales well above any of the others competitors in the U.S., however, Vanderpool acknowledged that might not be a realistic goal for Performance Additives, "but we still want to aim high."