(From the Nov. 28, 2011, issue of Rubber & Plastics News)
BERWYN, Pa.—Some businesses initially may be a bit passive when they become stand-alone entities after enjoying the benefits of being part of a large corporation.
Styron L.L.C. isn't one of them. It stepped out on its own in mid-2010, quickly adjusted to the market and never looked back, company officials said.
Since then the firm has been selectively and aggressively growing, primarily through expansions that place it close to its customers. It also has been transitioning from a maintenance mode to a firm with a portfolio that's bolstered by what it believes is a top-notch research and development center, and has been developing new families of rubber, latex and plastics materials.
The one-time Dow Chemical Co. division—purchased by Bain Capital Partners, a private equity group headquartered in Boston, in June 2010—also has been steadily refocusing its internal operation as an independent organization.
It's concentrating on key markets, including tires, construction and medical, according to Marco Levi, vice president and general manager of emulsion polymers.
But that's only the beginning, he said. Styron will continue to aggressively build its operation, either through expansions or acquisitions. It's primarily looking at emerging geographies to grow, but virtually any part of the globe is a possibility, especially in terms of rubber and latex, Levi said.
Headquartered in Berwyn, the maker of styrene-butadiene latex and synthetic elastomers, polystyrene, ABS, SAN polymers, expanded PS and polycarbonate launched several initiatives in 2011 aimed at significantly building its business and capacity in key sectors.
Topping the list is the addition of a 50,000-metric-tons-per-year production line for solution SBR at the company's Schkopau, Germany, plant at a cost of about $125 million.
Levi said the firm made the move because there is a strong need for greener high-performance tires in Europe as well as many other parts of the world, including the growing Asian market.
Construction of the new production line, which is being built alongside existing trains, began in May and is expected to be completed by September or October of 2012.
The investment “is a strategic fit with our leadership into the SSBR market,” he said.
In addition, Styron plans to boost its styrene-butadiene latex capacity in China with the addition of a production line at its plant in Zhangjiagang that primarily serves the growing paper and paper board industry in the country.
Construction of the line is expected to be complete in late 2012.
Levi noted that the company has a major, long-term, presence in the SSBR sector and understands the changing needs of its customers.
“The new capacity will help them develop the next generation of products, especially in the tire market where there is increasing demand for greener, higher performance tires,” he said.
It's likely growth will be spurred by new, stricter environmental legislation by countries in Europe, which covers mandatory rolling resistance of tires, expected to be formally introduced in 2012.
Other countries are expected to follow Europe's lead.
In addition, the executive predicted consumers will push for high-performance tires with low rolling resistance which will spur a greater need for the products.
“Safety, fuel economy and durability, that's what consumers are looking for in their tires. And that's what they'll get when tire manufacturers work with Styron,” he said.
The company currently is rolling out its third generation of SSBR for tires, according to Levi.
“We're leveraging our technology for a new generation of polymers for tires. It comes down to basic chemistry—designing a new rubber that reduces rolling resistance without compromising on grip and wear. And our engineers are bringing it to market.”
Although they didn't receive the same fanfare, two initiatives that are extremely important for Styron to be a successful business in the future are the development of the firm as an independent company and the creation of new products across the board, but especially in the latex and rubber sectors, Levi said.
“A lot of effort has gone into building a stand-alone company that focuses on the markets we serve or the markets we potentially serve,” he said. And it has made a significant investment in new product development and will continue to do that in the coming year, he said.
Levi said because of those initiatives, the firm's rubber and latex segments will continue to grow in 2012 as the initiatives launched in 2011 carry on through 2012.
The new year also will bring a name change for the company. It will be called Trinseo S.A. beginning sometime in 2012, although a definite time has not been determined.
The name Styron is tied to the styrenics chain, but the company is much more than that, Levi said. All of the firm's products “are vital to the end users,” he said, “so there's intrinsic value,” which is where the name Trinseo came from.
While the outlook appears good for Styron, Levi does expect some stabilization of economic growth. Markets and demand are slightly weaker, but he expects demand to pick up in the first quarter of 2012.