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PVC Stabilization Trends: An Interview with Baerlocher at K 2016

SpecialChem – Nov 9, 2016

Arne Schulle 
Arne Schulle
We interviewed Arne Schulle, CEO of Baerlocher during K-2016 in Düsseldorf, Germany about the highlights of the 'K' show, big launches and emerging evolutions in the markets. Read more to better understand his company’s strategy and the global PVC-stabilization market.

What have been the highlights of Baerlocher since the last K-Show?

Since the last K-Show, 

  • Baerlocher has invested in two brand new plants in Turkey and in China. They are both fully active and we will continue to invest in them. This is one thing when we talk about growth in our additives business: Geographical Expansion. We have already decided to be backwards integrated into China and the investment has started. Furthermore we will invest capacity there as well. 

  • On the other hand, we invested in laboratory capacity in the US - application and wet labs. Morevoer Europe has completely converted to more sustainable PVC stabilizers additives, and this is a huge success. 
During 2015, the entire supply-chain was lead-free, and we went even further as the production also switched to lead-free solutions. Why am I mentioning this, is because we want to become the world leader in Calcium (stabilizers) Chemistry. We only focus on these sustainable additives at Baerlocher.

We also invested in extrusion capacities so we can simulate the clients’ applications.

Are you launching new products at K 2016?

On one hand we have PVC additives and additives based on oleo-chemicals on the other . Our US teams have developed resins stabilizers technologies based on the second family, for PE and PP. We have started selling them to the PE and PP suppliers and then “moved them down” the value chain to the recycling industry. We created the Baeropol T Blends.

Which markets will drive the demand the most for Baerlocher in the next 3 years?

  • For PVC part, you surely know that by 2020, 50% of the world’s consumption will be in China. So, our investment in China will enable us to reach the 1st or 2nd position, that we want to have on each of our markets.
    We also see India as a key market for us that will outgrow others. PVC is a construction-led market and you would better be present in the regions that grow fast, i.e. the Emerging Ones. 

  • Regarding our investment in the Turkish/ Middle East market, in spite of the present geopolitical uncertainty of the region, we definitely see it as a growth region. And we are confident about this.

  • For, oleochemicals, i.e. our functional additives where you find our metallic stearates and our Baeropol RST. Example, which concern primarily Europe and the US for us, the outlook is favorable as the PE and PP production capacities are expanding at rapid pace.

  • Besides this, a slight change in the PVC stabilization market in the US, which is historically a tin-based market, towards calcium-based solutions. In this case, the move is technology-driven, not regulation-driven. 

What are the biggest trends you see in the PVC stabilization market? Do you expect regulatory changes in the PVC stabilization market in the near future?

Ca stabilizer 
Figure: Product forms of
Calcium-based Stabilizer system

Growth of PVC applications in developing markets is certainly a very important part. For the moment emerging countries are rather using lead-based stabilizers. In China for example, the lead-based proportion is rather high. You are talking about the 80%.

But, the Chinese Plastic Processing Industry Association issued a statement that they wanted to ban lead as stabilizers within 3 years. Whereas, It took Europe 15 years, this is a super achievement. They even aim at doing the same in a much shorter period of time. It is happening and we are actively participating to reach that goal.

Regulatory changes in other emerging economies will further accelerate. South-East Asia and Middle East – Africa have already started started already in applications like PVC profiles. And they will accelerate their conversion towards more sustainable solutions. South America has been a calcium-based market for quite some time already.

What is the importance of non-PVC markets now for Baerlocher?

Globally, non-PVC applications represent roughly one third of the revenues and PVC two-thirds for us.

In Europe, Middle-East and the US, we focus our growth rather on the non-PVC functional additives. In these regions, we put more emphasis on operational excellence, zero tolerance to quality defects and on innovation.

How does Baerlocher position itself vs. the digitalization of the economy?

PVC 3This is a good thus difficult question to answer. Our industry is not at the forefront of digitalization. Moreover, if you serve many different markets with many different needs, digitalization is an even bigger challenge. We are not there yet with a strategic approach. But I am sure that everything that can be digitalized will be digitalized!

Regarding production, digitization has already started. You hear a lot of buzzwords like Industry 4.0, Internet of Things and machine-to-machine communications. Is it there yet? The big point will be to integrate customers, but also customers’ customers and all players along the value chain in a collaborative way to create a new value proposition. I cannot tell what and how exactly for the moment, but it will come. Even though we have no clearly-defined strategy in place at Baerlocher right now.

At Baerlocher we would focus more on improving the service to the customers than to sell our additives 5 cents cheaper. This is where the industry would create breakthrough, beyond the traditional customer – supplier relationship. We are not there yet, but this is where we are heading.

About Arne Schulle

He joined Baerlocher GmbH in 2003. Due to the international experience and qualification previously acquired in the chemical industry, he took over the position of Chief Financial Officer (CFO) of the Baerlocher Group of Companies in 2005.

With effect of January 1, 2007 he was appointed Managing Director of Baerlocher GmbH and took responsibility for both the results of the Strategic Business Unit Special Additives, and the management of the Strategic Business Unit PVC Solid Stabilizer.

In addition, he was made Chief Operating Officer (COO) for all Baerlocher activities in Europe in 2009. In 2010 Arne Schulle assumed the role of Chief Executive Officer (CEO), taking over full responsibility for the Baerlocher Group of Companies.

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