Think Globally, Supply Locally

March 10, 2011
The merger of Süd-Chemie AGs and Ashland Inc.s foundry chemicals businesses late last year established a new commercial presence in metalcasting. ASK Chemicals CEO Stefan Sommer addresses the new companys objectives and opportunities.
Stefan Sommer

Chemicals GmbH was established officially just before the start of this year. What exactly does that mean?
Sommer: When the foundry activities of Sd-Chemie and Ashland were merged, one of the foremost and largest companies in the foundry chemicals market was created. We are globally active, with a current tally of 30 subsidiaries in 24 countries and 16 production sites. Thanks to our international presence, we can offer tailored products and highly qualified technical service in the key global markets. The combination of the joint venture partners’ research facilities means that we also have a presence in research and development on three continents.

We are not new to the market – even though we now have a uniform identity in the market for the first time. The expertise of the new entity is based on the experience and qualifications of the employees of the companies involved. Some of these companies can look back at more than 100 years of tradition in their respective specialty fields. These companies have already enabled us to generate (pro forma) revenues of 430 million (approximately US$ 550 million) in 2010.

With over 1,600 employees around the world, we are available to our customers as an innovative partner and can offer product-efficient solutions for local requirements. This is especially true for the markets, still referred to as “emerging economies”, like India, China or Brazil. The foundry production in these locations has increased many times over recent years. China now produces almost three times as many foundry products as the whole of Europe, India is well on course to leapfrog North America in the rankings and Brazil is hot on Germany’s heels in terms of tonnage.

What was and is the objective of a merger of two successful companies?
Sommer: On one hand, the merger represents a logical response to the developments taking place with our customers and in the market. Some of our customers are structured as a small or medium-sized business; here we act as a supplier of ‘specialties’ – products and services often geared toward the individual requirements of each customer.

Another share of our customers comprises corporate groups with global production that are now particularly involved in the new global growth markets. With product innovations and quality services, we can provide these customers with local support to help them expand into new markets and satisfy their needs even more consistently.

We offer to nearly all of our customers the same standards of quality geared toward the high requirements placed on developments in Germany and the U.S. Our global transfer of expertise will become ever more important, especially in view of the questions of environmental compatibility and resource conservation which are so important for the foundry industry.

On the other hand, there is also a very clear corporate goal and thus strategic challenge for the merger, and that is the ongoing expansion of our position as one of the foundry industry’s leading full-service suppliers.

Combining knowledge and the use of such knowledge can have very different effects. What does it entail, and how does it produce added value for customers?
Sommer: The specific aim of the new company is the exploitation and utilization of the growth potential generated by the combination of the foundry expertise, products, and experience, as well as the global sales and production networks of the individual companies of ASK Chemicals. For example, it will enable product development to be performed more quickly and systematically. This is what our customers expect from us as a technology driven company and one of the sector’s foremost suppliers.

We think globally but trade and supply locally – that is a definite benefit for our customers.

Future-oriented topics such as energy and the environment are of particular significance for strategic growth. In our own research and development centers, ASK Chemicals designs special technologies and products for these purposes. By means of sustainable, environmentally compatible manufacturing methods and application areas, we provide crucial support to foundries in their efforts to manage existing resources in a more cost-effective and environmentally friendly manner.

A current example is provided by our inorganic binder systems, which have successfully proven their readiness for ongoing production. As far as we are concerned, the entire area of sustainable developments is a market segment with considerable potential for growth. Here, too, we expect further requirements from our customers. Producers of advanced technology in particular must meet the sustainability requirements of politicians and society at large. Our products help them to achieve this, providing real added value for the customer.

Many of our customers are under pressure with regard to costs, as well as developing innovative products and seeking process optimization. We can use our global presence to help customers save costs and time. This is particularly true for customers who are expanding in the growth foundry markets of Latin America, Northeast Asia, and Eastern Europe. We want to play an active part in this development.

What are the requirements that these new markets present to a supplier of foundry consumables?
Sommer: Our very specific area of expertise lies in developing solutions in a systematic and holistic manner. These solutions are possible thanks to the skills of our employees, who have an impressive grasp of all products in the foundry process chain. This results in a deep understanding of foundry processes, ranging from the design of castings via simulation services and the transfer of research findings from the laboratory to the production level right through to efficient series production of high-quality castings. We develop advanced technology and support our customers in the continuous optimization of their processes, setting sector standards all the while. This is what makes us different, and we plan to exploit this on an international scale.

The result of this approach is that we can lay claim to leadership in innovation, which we bring to bear in our products and applications. The topic at the top of the agenda at the moment is increasing efficiency; In other words, raising performance and productivity while simultaneously reducing emissions and conserving resources.

The matter of sustainability is an urgent one in this respect, especially when it comes to the growth foundry markets. Where the expansion of production capacities in India, China or South America is concerned, we see a responsibility to society with regard to conservation of resources and the environment. The rise in productivity needed in the foundries to meet the growing demand in these countries for investment or high-tech products cannot be at the expense of increased emissions. This is becoming more of a concern lately due to climate change.

This is exactly where we intend to make every effort to apply our technological competence, developed on the basis of intensive research. We can make a serious contribution to optimizing antiquated foundries with our modern processes and helping to build new production sites that meet the latest standards.

Which areas of product development will be accelerated at ASK Chemicals?
Sommer: The results of our intensive development work in this respect can be observed in new product families, and one example is inorganic binder systems.

Inorganic, and thus emission-free binders, in core manufacturing eliminate up to 98% of the pollutants of conventional systems, thereby making a decisive contribution to the reduction of noxious emissions. With our INOTEC binder system, foundries already have access to a technology which represents an environmentally sound and economic alternative to conventional core manufacturing methods. We will develop products for other areas too with the same determination as we have here.

Cold-box high-efficiency systems are a further component of our sustainable products and are designed for applications where you would not want to forgo cold-box processes. Highly reactive binders, which can only be used in much smaller amounts but still provide the cycle time and strength standard in modern series casting processes, are a major feature of this generation of binders. Another example is that of quick-drying water-based coatings, which facilitate the transition from alcohol to water-based coatings, in turn eliminating emissions produced by the combustion/ evaporation of the alcohol. The emissions from conventional systems can be reduced by coatings with absorptive properties, for example. We help to develop new materials for coatings with metallurgical properties; for instance, by the targeted generation of flake graphite in the edge zone of highly stressed components. And these are just a few selected examples.

Which countries and markets take priority for the new company and how do you see the industry developing in 2011 and 2012?
Sommer: Fortunately, the global foundry markets have recovered quickly. The drastic collapse in 2009 was followed by an explosive resurgence in 2010, which is continuing into 2011. There were minor dips in growth in the emerging economies of China and India, but these subsequently returned to normal and have remained so since. Initially, priority is naturally given to the markets in which the technologies of the future will be developed, and in this respect, Germany and Europe are right at the forefront, but they are joined by the growth markets of China, India and Brazil.

Are there other activities that identify ASK Chemicals as a global company?
Sommer: In contrast to the past we have not been seen as a uniform identity. Today, all activities are positioned under the new umbrella brand of ASK Chemicals, which is represented by our new logo. Our employees across the world share technologies and solutions, while we are actively committed to our global business. Our R&D facilities on three continents show every day how innovative strength can be generated from this international exchange.

We look forward to this opportunity.