Staying Ahead in the Coatings Business through Future Oriented Innovations

— Interview with Dr. Ulrich Kuesthardt, President of Evonik Industries’ Coatings & Additives Business Unit

Evonik Industries recently started up its new isophorone and isophorone diamine plants in Shanghai. Located in the Shanghai Chemical Industry Park, the plants were built in less than two years using investment of over €100 million. It has an annual output capacity of 50 000 metric tons, and will primarily serve customers in Asia’s coatings and paint, construction, adhesives, and composite industries.
   Evonik is the inventor of isophorone and has over 50 years of experience in isophrone chemistry. It is the only company in the world that covers all refining stages of isophorone, and has been able to maintain its leading position within the industry by constantly innovating for the future.

Friendliness to the Environment, Versatility and Resource Efficiency: Future Coating Trends

First of all, could you please introduce the role and importance of the Coatings & Additives Business Unit at Evonik? What industries it mainly serves and what are its major customers?

[Dr. Ulrich Kuesthardt] Applications in the coatings industry is one of Evonik's core businesses, of which around 60% of sales come from the Coatings & Additives Business Unit (BU). Asia is one of our most important markets, and China accounts for about half of all sales in the region. As a result of our ambitious investment program, the proportion of Group sales generated in attractive growth regions will increase greatly in the future. Evonik will then have a balanced presence in developed and emerging markets.
   Evonik produces a wide variety of coatings-related raw materials, but that’s not all we do. We also develop solutions, and can provide comprehensive solutions for many applications. Our coatings cover almost all major applications, including architectural coatings, automotive coatings and other industrial coatings. In addition, we also offer several highly innovative solutions suitable for electronic coatings, packaging coatings, and other fields.
   We expect significant growth in the coatings market over the coming years. So Evonik also attaches great importance to the future development of coatings related businesses.  

What do you see as the major growth points for the coatings industry in the future? What are the key industries for Evonik?

[Dr. Ulrich Kuesthardt] The shift from solvent-based to water-based coatings with a high solid content is a new trend that we’re very excited about. How to use coatings to improve resource efficiency is also something we’ll be paying close attention to in the future. For example, one of the crosslinkers products made at our new isophorone plants will be specially used in the wind power industry. We also produce special oil additives that improve the efficiency and fuel consumption of lubricants. In the future, coatings will also become even more versatile. Traditional coatings have only been for protective purposes, but the coatings of today may also need to offer additional performance such as high strength, scratch resistance, etc.
As a solutions provider, identifying customer needs and new trends in applications is a top priority for Evonik. We provide original solutions for the coatings industry that can be used for all coatings including woodwork, architectural, automotive and industrial coatings.

Urbanization: A New Opportunity for Chinese Coatings Industry

What opportunities and challenges will China face in developing its coatings in future? What new growth points will this provide for Evonik?

[Dr. Ulrich Kuesthardt] In the coming years, urbanization will become one of the main drivers behind economic growth in China and other fast-growing Asian countries and regions. It will drive all aspects of applications, including encouraging the shift in coatings application from solvent-based coatings to water-based and highly solid coatings. The pace of urbanization today is extremely fast, and we see it continuing to be the foremost driving force for economic development in China and Asia over the next 10 to 15 years. The coatings industry will also grow at a minimum annual growth rate of 6%, which represents an incredible opportunity for Evonik.
We’re also paying close attention to the Chinese government’s increasing concern for environment, which will drive the shift towards water-based coatings in China. For Evonik, this is a great opportunity, since the strongest sales in our Coatings & Additives BU already come from water-based coatings. In the future, we will continue to innovate in order to comply with China's ever-more stringent environmental laws and regulations.

Maintaining Competitiveness through Continuous Innovation

Today’s global economy is still in flux, and there is fierce competition in markets – including the coatings market. In such a competitive environment, what are the core competencies of Evonik that have allowed it to stay ahead of the competition?

[Dr. Ulrich Kuesthardt] Key to staying ahead of competitors is the ability to innovate. At the moment, China’s economy is extremely complex. Our response is to continually innovate, providing customers with solutions that enable them to become more competitive, which in turn is beneficial to our growth. That’s what has allowed Evonik and the Coatings & Additives BU to maintain steady growth in recent years.
   We also see local investment as very important. We just celebrated the opening of our isophorone plants in Shanghai, which will bring our best technology to date to China. This is another way for us to enhance our competitiveness in the country.

What is the starting point and direction of innovation for Evonik? What achievements have you made so far?

[Dr. Ulrich Kuesthardt] At Evonik, innovation is divided into three pillars. The first pillar uses core products as the starting point for innovation; in the second pillar, we innovate for important core applications; in the third pillar, we innovate based on future trends.
   In coatings, our biggest strength is the ability to provide a wide variety of raw materials and solutions to our customers. What sets us apart from competitors, furthermore, is our ability to combine technologies from different Evonik Business Units in the development of innovative new products and solutions. For example, we combined isophorone technology with silane technology from another unit, and applied these leading technologies to the development of automotive coatings, woodwork coatings and other highly scratch-resistant coatings, which ensured great luster and perfect hardness.
   When it comes to innovating for the future, one of the latest long-term applications of Evonik’s Coatings & Additives BU is in the electronics industry. We’ve developed an innovative liquid process that is combined with a new metal oxide semiconductor ink to produce TFT for display devices. Called iXsenic?, this new brand represents a comprehensive materials toolkit for liquid processed oxide TFT and other original films. The success of this technology will bring revolutionary changes to the production of display devices. Coating may even become a printing technique of the future, helping to simplify and speed up production of display devices. Since so many manufacturers of display devices are located in China, the country represents a tremendous potential market for us.

Could you tell us a little about Evonik’s experience in application innovation?

[Dr. Ulrich Kuesthardt] Our downstream customers are very important to us and we work very closely with them. Only by understanding our customers and their needs we can provide them with better solutions. At Evonik, we have always invested a significant amount of resources into working with our customers in R&D. Currently, we are collaborating with several important global strategic partners on a number of R&D projects. Unlike technical services in the traditional sense, this collaboration involves R&D personnel from different companies all working together to create new innovations. Of course, in the future we’ll also be working with more and more top companies from Asia and China.
It's been over a year since Evonik completed the third expansion of its Shanghai R&D center and established a laboratory solely devoted to coatings R&D. By incorporating all of our resources in coatings technology, the laboratory allows us to jointly develop new products and provide the best solutions for our clients.

Reference:

Isophorone was invented by Evonik Industries in the 1960s. Isophorone, isophorone diamine, isophorone diisocyanate, and its derivatives are important components in the production of, for example, industrial flooring, vinyl, and paints and coatings, as well as for the growth field of high-performance composites, and in chemical synthesis.
   The global market for isophorone and its derivatives grows at a stronger annual rate than global GDP, with Asia showing above-average growth. The demand is particularly driven by the megatrend of resource efficiency. Thus, composites, which are used, for instance, in lightweight construction for automobiles as well as in highly durable wind power stations, offer above-average growth potential.
   In addition, isophorone chemistry prolongs the life expectancy of heavily used surfaces, which reduces maintenance cost and often makes renovations superfluous. Examples include floor coverings in parking garages, facades exposed to demanding climatic conditions, or ships operating in salty ocean water. Growth projections are also high for environmentally friendly coating technologies, such as UV-curing systems or solvent-free powder coatings.