ContiTech rides out bumpy market

FAIRLAWN, Ohio—There have been plenty of swings in the market, especially in the oil and gas and mining sectors, but for the most part ContiTech NAFTA has remained on course and in a growth mode.

It has also been a year and a half of change for the North American arm of ContiTech A.G., one of several Continental A.G. businesses.

Throughout 2015, after ContiTech finalized the purchase of Veyance Technologies early in the year, the name of the business was changed to ContiTech NAFTA, personnel and responsibilities were shifted around, and the company took on a whole new look and attitude.

That created a major highway for ContiTech to ride to the top spot in the North American conveyor belt and other markets.

It remains in good shape, despite the poor situations in the coal and other mining and oil and gas segments.

Over the last year, the company upgraded equipment—primarily presses and calenders—at its plants in Halstead, Kan.; Marysville, Ohio; and Mexico, according to Jim Hill, CEO of ContiTech NAFTA and a 28-year veteran of the industry.

But, like most heavyweight belt manufacturers, Conti-Tech has been saddled with excess conveyor belt capacity throughout the North American region and globally.

It was forced to make cutbacks because of the downturn in parts of the mining industry, including closure of its Bowmanville, Ontario, conveyor belt plant in mid-2016. Because of the downward slide in the oil and gas market, cutbacks also were made at the company's Grantville, Nova Scotia, factory, which handles most of the company's oil and gas products.

Globally, ContiTech halted production of steel cord conveyor belts at its plant in Volos, Greece, in March due to poor commodity markets, particularly the lignite mining industry.

It relocated production of steel and fabric reinforced belts, custom mixing and rubber-based adhesives from the Bowmanville factory to other underutilized facilities within the company. Equipment and machinery at the Bowmanville site was moved to the Halstead and Mexican plants.

Despite the slump, Hill remains upbeat about Conti-Tech and its future prospects, principally because of improvements he has seen in segments served by the belt industry. Those include aggregate, sand and gravel, and construction, he said in a recent interview at ContiTech's U.S. headquarters in Fairlawn.

“There was an uptick in mining in 2015, but then the industry fell again,” he said. While mining remains slow, he noted, of late there has been some belt orders coming into the company.

Hill expects 2017 to be flat for the mining sector.

Lightweight belting sales have been steady for the firm, growing from year to year, he said. PVC belts used for package handling, exercise equipment and to convey food have been good performers, he added.

Because ContiTech has a very diverse portfolio, Hill said, “We've been able to weather the storm better than others. For instance, automotive is going strong and our governmental business—primarily specialty track systems—is doing well.”

Its mobile fluid systems hose and vibration control operations also have been solid along with its power transmission belts, although in the NAFTA region that's a small business compared to ContiTech's large automotive transmission belts business globally.

ContiTech NAFTA has gained some ground from new product introductions “and new belts are always in the pipeline,” according to Hill.

Its latest introductions include:

• The ContiAlert belt monitoring system, which allows users to view belt wear in real time, informing the operator when the rubber on a belt has worn to a specific depth and needs to be replaced, avoiding extended downtimes;

• A heat control system for ContiFlex Vulkan, a line of Heritage conveyor belting used for heat applications, applicable to the cement, steel, iron works, refinery, chemical and fertilizer industries; and

• A lighter weight Texsteel conveyor belt that uses aramid synthetic fibers as strong as steel that requires lower power consumption and reduces energy costs.

They were on display at NIBA—the Belting Association conference, held Sept. 14-17 in Indianapolis.

Others include ContiClean, a special compound to make it easier to clean belts, and ContiPlus, an online belt monitoring tool. Future ContiTech growth will continue to be driven by new products and services, Hill said, because that's the lifeline of any good business.