US' Lehigh to expand in Europe, eyes Asia for new base - CEO

10 April 2014 04:01 Source:ICIS News

Alan Barton, CEO of US Lehigh TechnologiesInterview story by Nurluqman Suratman

SINGAPORE (ICIS)--US-based Lehigh Technologies is expected to build a second micronized rubber powder (MRP) facility in Europe as it looks to expand its production beyond the US, with Asia a possible location for another manufacturing base, the company’s CEO said on Thursday.

The company is planning to build the new plant in Europe with Spanish waste-to-resource company HERA, Alan Barton, the CEO of Lehigh, told ICIS in an interview.

Lehigh Technologies currently takes recycled rubber such as from used tires and converts it into an ultra-fine rubber powder that can be used in a variety of consumer and industrial applications, such as high performance tires, consumer goods, construction materials, and more.

Lehigh in 2012 said that it will partner with HERA to provide MRP for the tire, consumer and industrial plastics and coatings industries in Europe.

No further details of the new plant or timeline were immediately available.

The company currently operates a manufacturing facility in Atlanta, the US, with an annual capacity of around 70,000 tonnes, according to Barton.

In Asia, the company is already selling its MRP to major tire producers in Japan, southeast Asia and Australia, Barton said.

“We expect our Asia business growth rates to be more than 30% year on year, with the initial majority coming from the tire and rubber industries. This estimates comes from past similar growth rates from our expansions in the rest of the world,” he said.

The company recently announced that it has tied up with specialty chemicals and ingredients distributor Connell Brothers to market Lehigh’s PolyDyne MRP to the tire and rubber industries in Japan and Korea.

The two companies will focus on broadening industry outreach, supply chain efficiency and technical support in Japan, as well as introducing MRP to Korea and southeast Asia.

“With one of the largest automotive sectors in the world, Asia is an important market for MRP,” Barton said, adding that Lehigh’s MRP has been used to make more than 250m tires globally.

In light of this, the company believes that Lehigh will need to manufacture locally in Asia, he said without elaborating further.

“This will put us closer to our regional customers, enable us to lower our costs and diversify our manufacturing footprint,” he said.

Looking ahead, Barton said that he expects Lehigh maintain its strong growth this year, supported by the backing of established venture capital firms such as Kleiner, Perkins Caufield & Byers, Index Ventures and Leaf Clean Energy.

“Our growth rates are expected to be—and are—much higher than that of the markets we serve, as we have demonstrated a consistent track record of over 30% growth each year. While we do not disclose our detailed financials, we expect that trajectory to continue,” he said.

According to Barton, the key growth drivers for the rubber markets as a whole are: cost reduction by managing the volatility of oil and natural rubber based materials; driving better performance; improved fuel economy together with an improved sustainability profile and better uses for end-of-life tires.

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By Nurluqman Suratman