Hexpol: A year of change, a future with promise

No industry survey is required to pinpoint North America's largest custom mixer.

Hexpol A.B., simply, leads the market.

In returning Rubber News' survey for 2022, the Malmo, Sweden-based company indicated it has North American custom mixing sales in the $500 million to $999 million range.

It is the only company on this year's Custom Mixers Ranking to indicate sales that high.

Hexpol Compounding recorded $1.17 billion in sales for the Americas in 2022. The compounding segment also includes Europe and Asia regions.

The last year or so has seen changes in executive leadership—one in the Americas that was intended and another in the top position for the overall group that was sudden.

The company has restructured to focus on topical markets rather than regions, a decentralized approach that brings Hexpol hubs closer to customers.

And the onset of EVs has Hexpol eyeing a bright future in custom mixing—both in the rubber and TPE spaces.

AKRON—More than a year into his position as CEO and president of Hexpol Compounding Americas, and Gary Moore arguably has seen more market fluctuations than during his first 15 years with the company combined.

3M is pulling out of PFAS materials altogether, and that has created waves in the global polymer market. FKMs remain a major source of business for Hexpol, as they do for many global custom compounders.

"If you have not started developing an alternative for a 3M polymer now, you are already too late," Moore said in May during a talk at the Rubber in Automotive Conference, organized by Rubber News.

Sustainability and the amount of total polymer that ultimately will be part of an electric vehicle are top-of-mind for investors. Renewable materials will continue to increase in demand, Moore said, and the Scopes 1-3 emission standards factor into all facets of manufacturing.

And supply chains, still chaotic, continue to jump from manageable to complete gridlock with little warning.

Moore, a 15-year veteran of Hexpol Group, the parent company to both the compounding segment and Hexpol Engineered Products, took the position in October 2022, succeeding Ken Bloom.

Moore has overseen a major restructuring at HCA, transitioning from a regional philosophy to a market-centric tack.

Within HCA, those markets now include, in an even one-third apiece, automotive (weatherstrip, air and fluid management and NVH), industrial (wire and cable, architectural sealing and highway construction) and specialty compounds (water management and oil and gas).

MALMO, Sweden—Bullish on the American thermoplastic elastomer market, Hexpol A.B. added Chicago-area TPE compounder Star Thermoplastic Alloys and Rubbers Inc. to the fold Nov. 14.

Hexpol purchased 100 percent of the shares of the 30-person company for about $26.5 million, on a cash and debt-free basis, from Thomas Dieschbourg, president of Star Thermoplastics.

Star Thermoplastics was consolidated by Hexpol retroactive to Nov. 1 and continues under Hexpol Compounding Americas, specifically Hexpol TPE Americas.

"The acquisition of Star Thermoplastics is in line with our growth strategy and will enable Hexpol to enter the American TPE market through a well-established company with a strong product portfolio," said Peter Rosen, Hexpol Group chief financial officer and acting CEO.

Hexpol said it will use a similar template in making inroads to the American TPE market as it did to drive success in the European TPE market.

In recent years, Hexpol Compounding Americas has developed a decentralized and coordinated approach to supply chain and distribution, with the intent of being closer to customers.

Dieschbourg, who will remain president of Star Thermoplastics, said the company—with about $20 million in net sales annually—will leverage Hexpol's technology and geographic reach.

Dieschbourg founded Star Thermoplastics in 1993 and has developed the company into "a technically advanced TPE company," according to Hexpol.

Star Thermoplastics has customers in the automotive, building and construction, medical, industrial, electronics and consumer spaces.

Star Thermoplastics maintains about 90,000 square feet of compounding and research space in Broadview, Ill., comprising advanced manufacturing lines and five research laboratories.

The company also has warehousing in California.

The company's TPE grades can be injection-molded, extruded and blow-molded.

AKRON—Who knew the human race would find itself exiting the ICE age for a second time?

As the world wades deeper into the waters of EV automobile technologies and farther away from the land of internal combustion engines, custom compounders are being forced to innovate.

With between 60 to 70 percent of Hexpol Compounding Americas' customers in the OEM space, e-mobility trends in rubber products matter.

"Coming out of the pandemic, there was a tremendous amount of change and unforeseen circumstances," said Bruce Wynd, chief commercial officer for HCA, at the first day of the Rubber in Automotive Conference May 10. The conference is organized by Rubber News.

"All of it was nothing anyone could have ever predicted or thought would happen."

As the compounding world peeks around the corner of this ICE age, it sees a new mobility that requires lightweighting and thermal management, noise and vibration dampening, and innovative material design.

The current average age of vehicles—which in the Americas is between 12 and 13 years old—should push the car buying trend to new heights in the coming years, Wynd said.

For the next six months, inventory will be replenished. And the microchip supply appears to have stabilized, Wynd said.

HCA is a 1,751-person segment that comprised about 55 percent of Hexpol Group's $2.2 billion in 2022 net sales.

"From our perspective, this is an age of opportunity," Wynd said.

This past fall, the world's largest polymer compounder lost the man who helped Hexpol get to that position.

Hexpol A.B. CEO and President Georg Brunstam passed away suddenly Sept. 1, the Swedish compounding group said.

"It is with great shock and grief that we have received this sad notification," said Alf Goransson, chairman of the group, about the unexpected death.

Brunstam joined Hexpol as CEO and president in 2008 and took over as chairman of the board in 2017, with Mikael Fryklund, formerly of Trelleborg, taking over the CEO position.

In November 2020, after the departure of Fryklund, Brunstam returned to his former leadership position, both as CEO and president of Hexpol.

Brunstam has been credited for developing Hexpol into "a world-leading player in the market of polymer compounds."

"Georg will be deeply missed within Hexpol, both on a personal and on a professional level," Goransson said. "Georg has created a strong organization with many highly skilled and qualified managers."

Deputy CEO and CFO Peter Rosen will serve as acting CEO and president until Klas Dahlberg takes the position by July 1, 2024.

Dahlberg, who comes to Hexpol from NIBE Climate Solutions, was named president and CEO on Dec. 19.

Hexpol A.B. garnered two separate International Sustainability and Carbon Certification Plus certifications, one in the Americas and the other at a production location in Germany, to conclude the year.

Hexpol Compounding Americas achieved the major sustainability milestone at its mixing site in Middlefield, Ohio, which is now certified as ISCC Plus.

The certification means that this Hexpol site—which works in rubber and silicone manufacturing—maintains a mass balance chain of custody for its raw materials.

This ISCC Plus award was issued Nov. 22.

Hexpol Compounding Middlefield now is certified to produce materials that use circular or bio-circular methods, and they have been proven as traceable across the supply chain—from the origin to the end product.

Hexpol TPE, a business division of Hexpol Compounding Europe and Sweden-based Hexpol A.B., is adding to its sustainability credentials, as well.

The world's largest custom rubber compounder on Nov. 27 was awarded the ISCC Plus rating for its facility in Lichtenfels in central Germany.

This global threshold "guarantees correct and transparent use of the mass balance approach."

For Hexpol TPE, this means that all upstream raw material suppliers for the company will have been verified as meeting the sustainability guidelines under the ISCC Plus grade.

The mass balance approach also means there is a gradual increase in non-virgin raw materials that are added to a particular TPE compound or application, so that dependence on fossil fuels drops but the performance remains.

TPEs are vastly more recyclable than rubbers as they do not contain crosslinked material.

Hexpol already is producing TPEs with this mass balance approach, including thermoplastic styrene, olefins and urethanes.

Hexpol TPE received an initial ISCC Plus certification for its Swedish site in 2021.