Flexsys name returns to tire additives business

PITTSBURGH—There was an old name on display at the ACS Rubber Division's International Elastomer Conference, one that again will be prominent in the tire additives world.

That name is Flexsys, which a number of years back was part of Solutia Inc. when Eastman Chemical Co. in 2012 bought what was left of Solutia. That included the Flexsys business, which boasted the Crystex insoluble sulfur line of additives and the Santoflex brand of antidegradants, based on its proprietary 4-ADPA technology.

Since that time, the lines had operated under the auspices of the Kingsport, Tenn.-based Eastman Chemical operation. But earlier this year, Eastman rebranded the Crystex, Santoflex and other product lines to include the Flexsys moniker as it prepared to sell those businesses to give greater focus to its Additives & Functional Products segment.

Eastman in June reached an agreement to sell that part of its rubber and tire additives portfolio—along with the Flexsys name—to private equity firm One Rock Capital Partners L.L.C. The $800 million deal—$725 million in cash at closing and up to $75 million to be paid based on performance of the business through 2023—is expected to close by the end of the year, according to Michael De Maegt, marketing director for Flexsys based out of Belgium.

"The Flexsys name has high brand equity, and for good reason," De Maegt told Rubber News at the IEC, held Oct. 4-7 in Pittsburgh. "It has always been the benchmark for customer service and customer orientation.

" ... It all started years ago, and talking to people at the booth, they still have very good memories of that company. So we are looking forward."

With the acquisition, One Rock gets ownership of eight plants—four in the U.S., two in Europe and one each in Brazil and Malaysia—along with two technology centers and more than 500 employees. Besides the Crystex and Santoflex lines, the deal included the Duralink HTS line of post-vulcanization stabilizers.

"Eastman's tire additives business is the global leader, known for high-performance, mission-critical products and technical leadership," Tony Lee, managing partner of One Rock, said at the time the deal was announced in June. "We are excited to partner with the business' highly experienced management team to further strengthen its unparalleled product portfolio and drive its growth as an independent company."

Gunes Celik, vice president and general manager of the tire additives business, is set to be CEO of the standalone entity once the deal closes. "As we prepare for this new chapter, we are excited to work with One Rock, which has a proven track record of establishing former corporate subsidiaries as strong standalone businesses, and providing the support and resources needed to build on their success," he said in the June 9 news release.

Since the announcement, the Flexsys team has received positive feedback from its customer base, De Maegt said. "They are very happy that the crew remains together, and all the people they used to work with will still be there."

While it's difficult to comment before the sale is completed, "we are pretty sure we are going to grow and build on what we have today," he said. "That's definitely the idea, to serve our customers even better than we are today, and to build on that."

One of the main strengths of the Flexsys operation is that the manufacturing footprint is spread across the globe, particularly during this time of supply chain difficulties. "Customers really do appreciate the fact that we are in their region and that we grow with them where needed," De Maegt said. "We don't have to ship materials from the other side of the world, with all of the delays and additional cost."

And despite the problems all along the supply chain, he said Flexsys has good contracts with its upstream suppliers so it has been able to procure the materials it needs.

"We also try to source as much as possible locally, because your supply chain is only as good as your weakest link," he added. "We believe we are in better shape than a lot of companies.

"Obviously, when you make a tire, you need all the ingredients. If you are missing one that may have an impact. We are monitoring the situation and trying to help customers as much as possible."

Like almost everyone in the industry, the company hasn't been immune to material pricing issues. Raw materials are expensive, and he said some manufacturers have raised prices multiple times. And with the 2022 Winter Olympic Games in China, that could lead to some shortages as the Chinese government likely will impose some factory shutdowns leading up to the games.

Flexsys, De Maegt said, has had to pass on price increases to its customers, as customers are following the same price indexes, and therefore understand the volatility in the market.

The product lines in its portfolio are supplied to virtually every sector of the tire industry, and for the most part, business has been strong. "Most of the (tire) plants are still running at fairly high production rates, at least in the West," he said. "I think the Western players have done a great job of managing the whole situation. What we see in China is some slowdowns, based on the economic situation there."

On the technology side, Flexsys is working on the next generation of its Crystex Cure Pro line, with the new product to be dubbed Copernicus, according to De Maegt. "It's a product that really is aimed at improving the performance of the tires," he said. "It's a kind of sulfur, but it does much more than vulcanizing."

The firm is in the test phase with customers, and he said things look promising.

"Basically you're able to produce tires that you can simply not make today," he said.

"It's really a game changer in the development of tires. You can reach performances and are mixing formulas you can't reach any old-fashioned way today. It's really a groundbreaking product."