Our View: Rubber News rankings tell story of industry's future

I'm going to let you in on a little secret: My head is spinning with numbers right now.

Over the past month, Rubber News published our first-ever ranking of global hose manufacturers, followed by our annual rankings of both the top 50 North American Rubber Product Makers, along with the top 50 producers of non-tire rubber goods. That's a lot of looking through annual reports, trying to decipher a never-ending flood of numbers to provide our readers with the data they need.

But I've also found the process to be a time for reflection, coming across company names that perhaps we haven't focused on in some time, or digging up some news tidbits we may have missed along the way. I will be honest, though, all the numbers spinning around sometimes bring threads of thought that may only make sense to me.

Here's a sample of the contemplation that this latest foray into the world of financial results has brought to the surface.

• When numbers don't seem to make sense: I'll admit I did a double-take when I saw that the Swiss firm Datwyler was paying $625 million for Q Holding's QSR business, which posted sales of $164 million in 2021. Don't get me wrong, I am a big fan of the QSR business. I've been to its Twinsburg, Ohio, operations on several occasions, and they are quite impressive, as is the firm's leadership.

So I did some investigation and found that, as is often the case, the value isn't necessarily what the P&L statements may say today, but what the entity can bring down the road. Datwyler says that, with trends such as electrification, connectivity and the Internet of Things, the system-critical sealing solutions that QSR brings will position Datwyler to take advantage of "attractive growth opportunities in the coming years."

• Beauty is in the eye of the beholder: The deal that brought that to mind was Eaton P.L.C. selling its hydraulics business for $3.3 billion to Denmark's Danfoss A.S. It took 19 months to complete, but the transaction finally closed in August 2021.

Now I know this may be a simplification, but Eaton saw the hydraulics business as a mature unit that didn't fit with the conglomerate's plan to be a high-growth company. It was a 10-percent sliver of the firm, and to Eaton management, the proceeds were more important as a means to get to its hoped-for future ends.

But for Danfoss, that Eaton business was a chance to transform the company. It brought 10,000 new associates and a roughly $2 billion unit that nearly doubles the size of its hydraulics division, giving it a wider product line, a larger global footprint and a step forward with its innovation capabilities.

As an added bonus, Danfoss gets a fluid conveyance operation complete with a highly regarded industrial and hydraulic hose operation that marks the company's entry into the rubber industry. And the best part is the company seems genuinely happy to be a player in the hose industry. A company official told Rubber News that getting that significant place in the market generally can't be done from the ground up, that only an acquisition can help accomplish that. And in its annual report, Danfoss said the "business brings a long history of strong and trusted brands, like Aeroquip, Weatherhead, Synflex, Boston and Winner, some of which have been relied upon for more than 100 years."

As an interesting footnote, Eaton's Golf Pride rubber club grip business had been part of the firm's hydraulics segment. Now it's been shipped off to Eaton's aerospace unit. I don't know about you, but to me nothing says "aerospace" more than golf grips. But Golf Pride is the giant of its field, and undoubtedly still posts strong profit margins, particularly with a renewed interest in the sport since the onset of the pandemic.

• What's in a brand name? While Danfoss will be able to lean on the recognition of the brands it inherited from Eaton, the Swiss firm Holcim Ltd. will have to go in a different direction with the Firestone Building Products business it acquired more than a year ago from Bridgestone Americas. The Firestone brand obviously carries with it a heritage that dates back more than a century, and its rubber and TPO commercial roofing products are one of the leaders in its field.

Often these deals only include use of a brand name for a certain period, unless a licensing agreement is signed. So as of June 21, Firestone Building Products took on the name of its new owner, becoming the "Holcim Building Envelope division of the firm's Solutions & Products Business unit." The Firestone-monikered products now will be marketed under the Elevate brand name, which Holcim said symbolizes its "continued commitment to deliver superior quality and innovation with advanced building solutions."

Holcim owns other trusted brands in this field, including Gaco, GenFlex and Malarkey Roofing Products. I'm sure if the quality and service continues as it had under Bridgestone's ownership, the Elevate brand will find its way in the market, but it will take me some time to get used to it.

• Follow the winding thought process: I've always said that I see rubber industry connections everywhere. I will admit that sometimes those connections may seem either thin, or take some time to identify. Doing research for our rankings issue was not different.

Earlier in the week, I was browsing through Freudenberg Group's annual report and came across the section on the Freudenberg Home and Cleaning Solution Division. Somewhere in the back of my mind, I knew Freudenberg owned the O Cedar brand (feel free to hum the iconic jingle used in its commercials). It, in fact, has owned the well-known U.S. name since 2003.

Then I came home two nights later, and my wife—without my having mentioned this for fear of facing some eye rolling—had purchased an O Cedar EasyWring RinseClean floor cleaning system. Where's the rubber connection, you ask? Well over on the kitchen counter were two boxes of Playtex Living premium latex cleaning gloves! Freudenberg, in 2017, purchased the Playtex household gloves business and its more than 65-year history, and packages it under the O Cedar name.

OK, now when it comes to stunning conclusions, that's probably not one of my best. But at least now you have a bit of insight into how my brain works when numbers are spinning about.