Key notes: 5 takeaways from the Hose & Belt Manufacturers Conference

CUYAHOGA FALLS, Ohio—Featuring 15 presentations, 16 exhibitors and a host of face-to-face networking opportunities, the Hose & Belt Manufacturers Conference returned to the Sheraton Suite in Cuyahoga Falls April 12-13.

The two-day event, hosted by Rubber News and organized in conjunction with Continental ContiTech and Beaver Manufacturing Co. Inc., highlighted the latest hose and belting trends, a promising economic outlook, how to navigate a post-COVID-19 business environment, the importance of sustainability applications in the industry and more.

Here are five key takeaways from the event.

The economy is growing—it just doesn't feel like it.

Roger Tutterow, professor of economics at Kennesaw State University, kicked off the Rubber News conference with his keynote address, "On the Economic, Business and Political Climate."

Despite the economic nosedive seen at the start of the pandemic in 2020, Tutterow said the manufacturing industry is actually in a state of growth, but it pales in comparison to the sharp rebound the industry met following the pandemic shutdowns.

"Economic growth remains in place for the current and third quarter, and probably well into the fourth quarter," said Tutterow, who also is director of the Econometric Center at KSU's Coles College of Business.

"But we need to acknowledge that the pace of economic growth has moderated and is transitioning back to something a little more normal—as opposed to the robust growth we saw due to reopenings in late 2020 and early 2021," he said.

"Recession is a period of diminishing activity in production, trade, employment and income," he continued. "Not below previous peaks. Diminish. Getting worse."

Despite headwinds in the supply chain, a tight labor market and inflation, Tutterow said the GDP is expected to see growth at a rate of about 2.8 percent in 2022.

"What you're looking at is industrial production versus its peak in February 2020," he said. "The manufacturing component of industrial production, which is roughly 85 percent, was down 19.9 percent in two months. Then we started reopening, and in May and June and July of 2020, we got right side up for manufacturing by early 2021."

Today, the manufacturing component of industrial production is up over 3 percent versus before the pandemic, Tutterow said. And according to the purchasing manager's index in 2021, it was the best annual performance in 35 years for the manufacturing sector, he added.

"The economy is gradually moving back toward normalcy," Tutterow said. "That de-acceleration of growth feels problematic in some sectors, but not in the industrial side of the economy."

Cost-effectiveness can only go so far. When it comes to supply chains, the money you save doesn't matter if you can't get the materials you need to manufacture parts and meet customer demands.

The pandemic-induced supply chain disruptions that have emerged in recent years, have given Continental ContiTech a different perspective of how to manage and approach sourcing.

"I don't know that we all realized how much we were single-sourced before," Jim Hill, CEO of ContiTech North America, said in a keynote presentation April 13. "That was a big eye-opening for us as we were looking through a lot of our materials, trying to find things as supply chains got extended as availability got tougher, how many items were single-sourced on."

Addressing that supply chain weakness, he said, involves taking a more aggressive approach to ensuring the stability of your supply chain. This means prioritizing the supply chain's ability to navigate challenges ahead of the most cost-effective solutions.

"We are also getting a lot of materials from certain other parts of the world, and many times we are trying to source boldly for savings, but I think savings has to go on the back burner," Hill said. "Now you are sourcing for stability. Savings is still important, but you can't shop, in my opinion, fully on cost."

The way Christopher Bradlee sees it, there is no denying that sustainability matters.

Look no further, he said, than what companies in the hose and belting industries are marketing: products made from recycled materials, processes that reduce carbon emissions and procedures that allow for bio-based, recycled materials in manufacturing.

In fact, Bradlee, market segment manager for hose and belt at BASF Corp., contends that everyone should be talking about—bragging about—the steps they already take to operate more sustainable.

"I see suppliers, I see manufacturers—I see everyone dedicating time and resources to this effort," Bradlee said. "This is something I think this industry is taking seriously and it is taking steps to go this way."

BASF is positioned to help companies throughout the hose and belt industry take more of those serious steps forward by providing more renewable, bio-based materials solutions.

Chemical recycling is one way that BASF does that.

"We can literally take tires—and, literally, consumer garbage—and get back to the original monomers through what is called the pyrolysis oil. This is another alternative to finding ways to make sustainability makes sense from a business perspective."

For sustainability to really make a difference, businesses must continually move forward, set new goals and achieve new aims. This is important, not just for the health of people and the planet, but for the health of businesses as well.

"It is important to talk and see what can you do," Bradlee said. "You should always run your business with good business decisions, and sustainability is going to be good for business decisions. It is going to help me grow my markets, help me differentiate, help me improve my productivity and processing."

When it comes to growing within your markets, sometimes, a change in perspective can do some good.

Taylor Jung, senior director of global product line management at Gates, challenged conference attendees to do just that.

Using the synchronous industrial belting market as an example, Jung explained that competition shouldn't be limited to other belting makers. When companies only see their competition in this light, it leaves them fighting for the same customers and jockeying for position in a limited market that offers little room for growth.

But if you consider other aspects of conveyance—roller chain for instance—your potential for growth within the market is exponentially stronger because you offer a product that has vastly different properties and benefits.

"I look at this (larger market) and say this is a better market analysis to look at than the first one because it gives me so much more space to grow," Jung said.

Sure, working for larger share of a broader market may seem overwhelming and may demand significant investments of time, money and energy.

The key is to prioritize.

"You cannot invest in everything to become everything to everyone all of the time," Jung said. "So where are you going to go grow?"

Ask some simple questions. How can you immediately tackle the bigger market with your products today? What developments do you need to make to tackle the second-most-logical areas? Once you establish those priorities you can begin investing in testing, R&D and marketing.

"We have to sell it differently," Jung said. "You need a new value proposition, a new marketing campaign and new customer bases that you have to go and attack."

Scott Boito said as product steward for chemical intermediates at Eastman Chemical, he is used to being the bearer of bad news. During his Hose & Belt Regulatory Update at the conference, he said everything has expanded exponentially. He warned that changes are underway or on the horizon both in the U.S. and Europe.

In the U.S., he said the EPA is conducting 22 high-priority risk evaluations and proposing to completely reformat its method of hazard and risk assessments on new and existing chemicals. Boito said evaluations of new materials are seeing severe delays—instead of 90-day reviews, the process now is taking longer than two years for each evaluation.

And for existing chemicals, the U.S. EPA's risk evaluations are undergoing what he calls a "sea change" in methodology, with the EPA taking a more hazard-based assessment, where he said the agency is looking at the materials in a "worst case scenario," rather than taking into account all the safe uses that make up the vast majority of usage.

As for Europe, he said the European Chemicals Strategy for Sustainability (CSS) will go well beyond what REACH has done in its tenure. Within 20 years, he said substances with no current classification under REACH likely will have two to three classifications with regards to CSS. He estimates there will be five to 10 times more substances that will be classified under CSS guidelines.

"CSS is evolving so quickly," Boito said. "Two years ago, it didn't exist. Now it's No. 1 on my hit list."