Composites 2017: A multitude of markets

The biggest news, as 2015 closed out was that year’s steep incline in mergers and acquisitions (M&A) activity. In 2016, that M&A activity continued apace.

The composites industry, in general, continued to show health and growth powered particularly by its aerospace, automotive and wind energy sectors. The biggest news, as 2015 closed out was that year’s steep incline in mergers and acquisitions (M&A) activity. In 2016, that M&A activity continued apace.

It began in January. Hexcel (Stamford, CT, US) reported on Jan. 7 that it had acquired full ownership of Formax UK Ltd. (Leicester, UK). Hexcel had previously acquired a 50% interest in the privately owned firm in December 2014. Later that same month, Owens Corning Composite Solutions Business (OC, Toledo, OH, US) declared its intention to acquire the glass nonwovens and fabrics businesses of Ahlstrom Glassfibre Oy (Helsinki, Finland) for US$79.5 million. M&A activities continue throughout the year , but three acquisitions were stand outs:

In mid-September, mold care products giant Chem-Trend (Howell, MI, US) announced its acquisition of Huron Technologies (Leslie, MI, US.) a maker of customized mold release agents and related products. The deal provides additional product technology, manufacturing and process know-how, raw material sources and customer segments to Chem-Trend. Significantly, the announcement followed news of Chem-Trend’s intention to expand its R&D facilities at its global headquarters in Howell, MI, US by 50% to support continued growth of its R&D activities.

Then, late in the year, resin suppliers Reichhold LLC2 (Research Triangle Park, NC, US) and Polynt Composites (Carpentersville, IL, US) were consummating a 50/50 merger that marked a substantial change in the composites industry’s resin supply chain.

The year’s biggest surprise, however, was Teijin Ltd.’s (Tokyo, Japan) September revelation that it would acquire a key North American automotive composite supplier, Continental Structural Plastics (CSP, Auburn Hills, MI, US), for US$825 million. CSP will become a wholly owned subsidiary of Teijin. Through this acquisition, Teijin intends to establish the foundations of an automotive composite products business in North America, and to accelerate its expansion as a Tier 1 supplier of high-performance composites to the global automotive market. The CSP takeover will do that: Since its establishment in 1969, CSP has provided leading-edge technologies in lightweight materials and composite solutions such as glass fiber reinforced plastic (GFRP) for the automotive industry. CSP provides full-service engineering support, and holds more than 50 patents covering materials development and manufacturing processes in composite materials formulation and design. Its Class A surfaces produced by its SMC technology have been adopted by a variety of automakers in the US, Europe and Japan.

Another trend was the continued practical realization of the much talked-about global trend for the composite industry. Materials and equipment suppliers based in North America and Europe not only pursued new markets in Asia but also, in greater numbers, established a presence there.

In February, Chinese company Kangde Composites Co. enlisted Cannon USA Inc. (Borromeo, Italy) for the high-volume production of carbon fiber-based composite parts made with HP-RTM technology. Pinette Emidecau Industries’ (PEI, Chalon Sur Saone, France) director general Jérôme Hubert announced on the first day of JEC World 2016 that the company has successfully completed a complete turnkey plant in Vietnam, near Ho Chi Minh City, for a Canadian customer, Camso (Magog, Quebec, Canada). In April 2016, Argosy International Inc. (New York, NY, US) started construction of its new 2,300m2 manufacturing facility in Taiwan. Hexcel (Stamford, CT, US) broke ground in Africa on April 26th for a new US$20 million engineered core facility in the MidParc Free Trade Zone Industrial Park in Casablanca, Morocco. In May, North Thin Ply Technology (NTPT, Penthalaz, Switzerland) expanded its offering of conventional weight prepreg following the installation of new equipment at its facility in Poland. And in an interesting role reversal, China-based glass fiber manufacturing powerhouse Chinese glass fiber producer Jushi Group Ltd. continued to add capacity to its plant in Suez, Egypt. Jushi announced the start of its second glass fiber furnace began at the start of June 2016.

No less pointed example of China’s growing clout, however, was the decision by the state-owned chemical group China National Chemical Corp. (ChemChina, Beijing, China) to acquire KraussMaffei Technologies GmbH (Munich, Germany) from Onex Corp., a Toronto-based private-equity firm, for US$1 billion. Although the KraussMaffei Group’s headquarters remain in Munich and the operating and corporate responsibility for the company will stay in Europe, the clear focus of growth for the company’s product development and distribution is China and the Asia Pacific region.

Whether political candidates in the US liked it or not, Mexico continued to be become a locus for manufacturing growth in both the aviation and automotive composites spheres. Philippe Petitcolin, CEO of Safran (Paris, France), on Feb. 12 inaugurated a new 10,000m2 facility in Querétaro, Mexico. SAMES Rep (Snecma America Engine Service) will be dedicated to the repair of CFM56 engine parts. During his remarks at the inauguration Petitcolin also announced the construction of a third Safran/Albany plant, in Querétaro, to produce composite parts for the new LEAP engine, the successor to the CFM56. SAMES Rep is Safran's tenth plant in Mexico, and was created to address the need for a repair facility serving the American market.

As the composite industry expands internationally, it also expands its reach into target markets. The highlights of current happenings and, where available, predictions of possibilities presented here for the major markets served by the composite industry are a taste, but can in no way be considered a complete banquet, of what’s in store for 2016 and beyond.

Related Content

Hidden potential: An indifferent year for M&A belies a rich vein of opportunity for acquirers

Guest columnist David Schofield, cofounder and managing director of Future Materials Group (Cambridge, UK), an independent strategic advisory firm, sees much unseen and, therefore, untapped potential.