With the automotive industry taking rapid strides in building innovative and sustainable solutions for the future, the coatings industry too has made phenomenal advances in their formulations. India may have been slow in adopting some innovations, but the country is a very strong base for manufacturing, has deep technical knowhow and delivers rapidly, said Charles W Shaver, Chairman & CEO, Axalta Coating Systems in a recent interview to Auto Tech Review. Excerpts:
Charles W Shaver is the Chairman & CEO, Axalta Coating Systems, a leading manufacturer of liquid and powder industrial coatings. Shaver began his career with the Dow Chemical Company serving in a series of operational, engineering and business positions from 1980 through 1996. Of his total experience, he has 33 years of leadership roles in the global petrochemical, oil, and gas industry and was most recently the CEO and President of the TPC Group from 2004 through 2011. Earlier, he served as VP & GM for General Chemical, a division of Gentek, from 2001 through 2004 and as a VP & GM for Arch Chemicals from 1999 through 2001. He earned his BS in Chemical Engineering from Texas A&M University, where he currently serves on the College of Engineering Advisory Board. Currently, he also serves as a member of the Board of Directors for US Silica and Taminco, Inc.
ATR _ How critical is the Indian market for Axalta’s global business?
CHARLES W SHAVER _ In terms of our net sales, we will close this year at about $ 5 bn, 18 % of which will come from the Asia-Pacific region. I expect the region to grow at about 20 % over the next five years, and at least two-thirds of the growth will come out of India and Asia-Pacific markets. We’re beginning to export out of India now to North Africa, Middle-East, Australia and South-East Asian markets.
We look at India as a high quality, low cost manufacturing destination, especially when many of the other countries are not cheap any more – China in particular. As long as India continues to be stable from a currency standpoint, and continues to have a low cost manufacturing footprint, it will continue to play a significant role for us. Apart from manufacturing, India offers very strong skill sets, technical knowhow and delivers at very good speed.
What is the innovation approach you take at AXALTA? What is the strategic role you see the Indian operations playing in Axalta’s innovation roadmap?
India has a consumer base that is certainly driven by value proposition. Some of the things we’ve learned from India include ways to make coatings as productive as they can, so as to make the customer happy – by looking at properties such as corrosion, longevity, colour and wear, etc. Consumers in other parts of the world could be less sensitive about these factors. We’re also in an environment that has relatively tough atmospheric conditions – humidity and heat – factors that really test the durability of the coatings.
We’ve developed core competency here with our lab, tech centre and a growing base of business. We develop coatings that we can then take back to other parts of the world, such as North Africa or other emerging markets. Some of the coatings we do in the US or Western Europe would never work here from a cost or applications standpoint. We also have our IT operations based in Delhi, which acts as the headquarters for the emerging markets.
Most companies use India as an application engineering base. Do you see the potential to use your Indian operations for core engineering?
Yeah, the other thing that is going to happen on coatings innovation is that you can do more and more via math modelling and computer simulation. It’s not just a simple simulated colour, but it’s about building molecules and then predicting what those molecules will look like when they get together. The more you can do that, the less you get to actually be in the labs making paint by spraying panels. The cost of development could be a lot less too. So, having the core IT here in India is very important.
The other thing that India has is a great technical base. The engineering and chemistry students that graduate each year, unlike in most places in the world, are really of high quality that we can tap into. Our key to innovation is going to be continuing to attract really good young people. Also, the role of women – whether it is in India or the US – has always been under served in engineering. Engineering is one field that I believe there isn’t actually any glass ceiling. I think women can go as high as they want to, but you’ve got to get them interested in engineering.
There seems to be a lot of reverse engineering happening at Axalta.
Well, technology now travels at breakneck speed. Twenty years ago, if you wanted to learn how to do good waterborne coatings, you had to go to the US or Western Europe, but now you bring in technology right here. You can always learn today what happened yesterday. I think it makes it challenging, because you still have to protect innovations.
The acceptance of technology in India is a lot faster. We can take what might have been a good coating coming out of Europe, and adopt that in India much faster. And that’s possible because you’ve got a combination of manufacturing and good technical workforce, who know how to take that coating and evolve that to what this marketplace needs and do it relatively rapidly.
As we talk of future mobility, the industry is likely to go through a variety of changes. Talk to us about the transformation that has happened in the coatings industry in the last few years, and how they are likely to impact the industry.
This is true not just in the automotive sector, but also in other industries. The transformation we’ve seen is one, going from solvent borne to water borne to low VOC (volatile organic compounds). Clearly, the focus has been on protecting the environment. But we’ve also seen the applications advancing with it. As people move to waterborne and other solutions, they’re also using new complex molecules that are making coatings that last longer, are thinner, needs lower temperature to apply and at less cost. Waterborne and low VOC coatings are much more productive – they offer better colour reproduction and better colour consistency and are much easier to apply. That’s been the transformation.
The molecules in coatings are getting so complex that the ability for new entrants to come in is almost non-existent. You’re not going to see a new player coming into automotive coatings or aerospace coatings. Because the technology is too complex and you can’t just go out on the street and figure out you’re going to make this paint. On the coatings side, innovation has now become very molecule driven, down to what the customers want.
For example, we have a good solution for powder coating on rebar (reinforcing bar), which even on bending, doesn’t crack the coating. You can double the life of bridges and highways by just having coated rebars. The powder coating protects the rebar from the acidity of the concrete. Over time moisture works its way into concrete. So, if you want a bridge to last 100 years not 50, some simple technologies like coated rebar and coated steel really help. Driving these infrastructures to last longer is where a lot of these innovations are going to come from.
Clearly, colour itself will see a lot of changes. As the Indian GDP continues to grow, you’re going to see more colours – on vehicles, houses or buildings. And I don’t mean extreme colours. In some newer big buildings in the world, architects have been experimenting with silvers, blacks and greys – things they couldn’t do before.
Considering what you said, would it be fair to assume that material research is being strongly pursued at Axalta?
Yes, we have about 1,500 people in the company that do product and process development, and lot of those are region-specific, looking at what a particular market needs. In that sense, maybe we are ahead of the technologies developed in the US, China or somewhere else.
What’s the penetration level of waterborne coatings today?
It really depends by region, and by sector and segment. It’s fairly low in India, while in Western Europe it’s pretty high. In some cases in the US, it’s actually driven by productivity and innovation, not by the environment. Waterborne coatings are not always driven by environmental needs, although that’s a great plus. A lot of it is driven by customer needs. In the case of refinish in North America and Europe, it’s driven by productivity. Somebody can paint out a car in less than an hour, whereas with solvents, it could take more than two days.
How big a factor is cost in India?
Today, about 15 % of the refinish automotive business in India is waterborne and it’s growing every day, as it is being driven by the demands from OEMs. Hyundai has asked all its body shops to go with waterborne coatings. The game changer would be when Maruti Suzuki decides to go all waterborne across its network. I think the day isn’t too far.
With colours of cars and buses getting more complex, body shops have to get smarter about repair. I think development in mobility will drive a lot of that – new technology, more composites, lightweighting, etc. When body shops would have to deal with sophisticated repair, colour match becomes all the more important. At that point, almost universally we’ll have people use waterborne coatings.
Coatings clearly will play a significant role in future mobility?
With EVs, two of the most critical elements are batteries and motors. We make impregnated resins that go into these electric motors for heat dissipation. You got to have batteries that last longer in our cities, and heat dissipation, cooling, longer battery and motor life are big deals. Coatings play a big part in being able to insulate heat, as well as attack corrosion properties.
In the autonomous driving universe, smart coatings should be able to tell the radar, LIDARs or sensors in the cars about the environment. We’re talking possibilities of a signature coating that could read whether it is a bridge or a bicycle and communicate back to the car. Now, that is 20-30 years away, but in a smarter environment, that would be possible.
TEXT: Deepangshu Dev Sarmah