HANOVER, Germany—Despite the fact that Michelin has owned Lehigh Technologies Inc. since October 2017, the majority of the other tire manufacturers remain comfortable doing business with the producer of micronized rubber powders, according to a company executive.
"We sell to seven of the top 10 tire customers in 18 countries and 45 tire plants around the world," said Kedar Murthy, vice president and general manager of Tucker, Ga.-based Lehigh. "There are more than 500 million tires that have been made with our product. We have relationships with all of these people and we continue to get new relationships with other tire companies."
Murthy and other Lehigh officials discussed the company's ongoing business during the Tire Technology Expo 2019, held March 5-7 in Hanover.
He said more than 90 percent of tire manufacturers indicated there was no problem with Lehigh being owned by Michelin, which in the end boils down to the trust Lehigh has been able to gain with its customers over the years. The business still operates under the Lehigh name and has only Lehigh employees in its headquarters and factory in Tucker.
"There's never going to be 100 percent because there's always going to be somebody who just is not interested in doing work with us," he said.
The major characteristic that hasn't changed with the ownership, according to Murthy, is that Lehigh doesn't share customers' technical information, either with Michelin or about Michelin with other tire makers. "All of us have experience in tires and the material industry," he said. "So we know how to work with customers and gain their trust."
Michelin purchased Lehigh in 2017 after the two companies had worked together for nearly a decade. The acquisition was aimed at Lehigh being an integral part of Michelin's Sustainable Mobility Plan, in which it plans to have 80 percent sustainable materials in its tires and recycle 100 percent of its tires by 2048.
"Michelin is not only using it today but will expand the use of it going forward," Murthy said. "They're hoping the rest of the tire companies also will continue to use more into the future. ... This is one platform that Michelin is looking at among several others to reach their target."
While Lehigh Technologies had been backed by venture capital investors from its inception through the acquisition, he said what Michelin brings to the micronized rubber producer is credibility that they are a global tire company supporting this technology. The parent company also brings improvements in best practices for processes and procedures in terms of manufacturing and quality.
"What Michelin is taking away is they understand the speed at which Lehigh can work at," Murthy said. "The entrepreneurial spirit lives on and the speed that we can drive new product introduction and technology is something that Michelin is interested in. That's why they haven't completely integrated us."
Michelin also is talking a bit more in public, something he said has been driven by Lehigh. The tire maker presented a paper on the technology at last fall's ACS Rubber Division meeting, and at this year's Tire Technology event, Lehigh gave a paper on the general market for sustainable material while a Michelin official presented on the use of MRP in tire compounds and where they're going to deploy it.
"So they're starting to talk more freely and publicly about what we're doing with them," Murthy said. "The key purpose is to generate more interest from other tire makers."
Other than that, he said Lehigh operates with a fair bit of autonomy. "They have their own internal programs to use micronized rubber product and we know about that because we have to be able to supply them," he said. "So they have several programs around the world for introduction of MRP over the next couple of years."
Lehigh also has been shipping MRP from the plant it opened in Spain in June 2018 to support Michelin's growth and to supply European-based tire companies, which had been supported in the past from the U.S. operations.
Lehigh started supplying product from the new plant first to customers that had experience with the material in the U.S. or other parts of the world, said Josep Freixas, business development manager for Europe, the Middle East and Africa.
"Additionally there are companies in Europe that we started from scratch with," he said. "Basically the drive is the same: We have experience in the market. I think this makes a difference because we put a lot of effort in knowing and characterizing our material and knowing how it works and behaves. That provides a significant difference between Lehigh Technology and other people dealing with these types of materials."
Even with the inroads Lehigh along with Michelin have made with MRP, there is potential for much more business, both in tire and non-tire applications. Thus far, the firm has focused on getting the material used in the tire tread, but other external components such as the sidewall are candidates for additional MRP usage, according to Glenn Denstaedt, Lehigh technical director for tire and rubber.
In addition, some tire makers are astute in using MRP in other components of the tire, while other companies have yet to focus on those areas. "We've only started to touch the depth and breadth of the market," he said. "There's a lot of growth potential with the tire companies that may be using less or little MRP."
And as tire companies get more used to the product and learn how to process it, there will be opportunities to increase the amounts of MRP used in the compound itself, Denstaedt said, noting that current applications range from 2 percent of batch weight up to 10-12 percent.
Murthy said the technology is proven for usage at 3-5 percent, and if all or a large percentage of tires just used that amount to achieve cost savings, the potential for MRP is great. "The challenges of working with this industry is it's very slow and tedious trying to convince somebody to try to do something different," he said. "We think with the acquisition by Michelin, things will start to change and people will start to understand they too can achieve cost savings by using micronized rubber powder."
Other areas where Murthy said MRP is being used include coatings, polyurethane foam, micronized EPDM that goes back into thermoplastic vulcanizates and rubber modified asphalt.
He said Lehigh has made inroads with several states in getting its material approved for use in asphalt projects, including Georgia, Florida, Louisiana and Texas. One challenge in this market is that some states, such as Texas, don't have just one Department of Transportation to work through, but also a number of sub-agencies.
In the rubberized asphalt market, he said Lehigh's acquisition of a technology called Rheopave has helped boost its success. Rheopave allows customers to use rubber powder in asphalt without the MRP settling to the bottom, greatly enhancing its effectiveness.