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August 15, 2019 10:45 AM

Kraton finds opportunities in tire industry

Bruce Meyer
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    Bruce Meyer, Rubber & Plastics News
    Kraton’s Nicolas Derville earlier this year at the Tire Technology Expo in Hanover, Germany.

    BERRE, France—Making additives for tires isn't the largest part of Kraton Corp.'s business, but it is one area the Houston-based firm is looking at for high growth with value-added offerings.

    The tire business, in fact, is a relatively new area for Kraton, coming with the 2016 purchase of Arizona Chemicals, according to Nicolas Derville, business director of tires for Berre-based Kraton Polymers France.

    One of the lines that came with that acquisition was a line of high-performance tread enhancement additives, marketed under the Sylvatraxx brand. These additives generally are used to improve the overall balance of grip, rolling resistance and tread wear, the "magic triangle" used to judge tire performance, he said.

    "This is a franchise that is managed pretty much as a business unit within Kraton," Derville said. "It's seen as a high-growth platform and with a lot of support to re-invest as the market grows."

    Derville himself is a legacy Kraton employee that spent a number of years leading sales on the polymer side, before moving to the mergers and acquisitions team. He was one of the people involved in the Arizona Chemicals acquisition and now has led the TEA resins business for about the last two years.

    The use of tread enhancement additives is a relatively new technology in the industry, having been commercialized the past 15 years but only really taken off in the last decade, according to Derville.

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    Kraton didn't acquire Arizona just for the TEA unit but for the company's overall envelope, including its offerings of bio-based chemistry.

    Acquisition update

    Not too much has changed with the Sylvatraxx business since the Arizona deal, he said, because the high potential for the TEA resins already had been identified.

    "If anything, we've continued on that momentum," Derville said. "In a traditional way, Kraton looks at this type of business with a long-term commitment to grow. We're seeing this as a growth vehicle for us, and are looking at accelerating the investments and the capabilities that we're putting in this business.

    For example, Kraton increased capacity in 2018 by 20 percent at its factory in Niort, France, a site that predominantly makes TEA, he said. The firm also recently added staff, primarily in its innovation and technical support groups in Europe and Asia, along with boosting sales capabilities, most notably in Asia.

    In a more subtle way, Derville said Kraton has back-integrated the materials used in TEAs. "In the current days of raw material volatility and uncertainty, we view that as an asset," he said, "especially where this allows us to minimize the short-term fluctuations in the ups and downs of prices. This provides long-term stability, reliability and supply, but also pricing that our customers are looking for."

    Besides Niort, Kraton has two other sites that support the TEA business, in Pensacola and Panama City, Fla., Derville said.

    Sylvatraxx enhancements

    Besides boosting the "magic triangle" properties of the tire, the Sylvatraxx additives come with the added bonus of containing a good percentage of bio-renewable content, up to 100 percent for some grades, he said.

    "Eco-mobility is a key driver for people to use Sylvatraxx," the Kraton official said. "It's all about moving from point A to point B in a more efficient manner, and therefore lower CO2 emissions."

    The recyclability and the bio-renewable content of the tire composition is becoming more and more important. "We're hearing that throughout the industry, and it's not just from our customers, it's actually down the value chain from the OEMs."

    Derville added that Kraton invested a lot of money in 2018 to get the official label issued by the European Commission for products that contain certain levels of bio-renewable product. "We got that sticker, which is a great differentiator in the industry," Derville said.

    Innovation also is a key part of what Kraton has brought to the Sylvatraxx family. Kraton has developed a new range of modified terpenes, which he said give the Sylvatraxx additives a high softening point, but low polarity and low molecular weight.

    "What this gives our customers is improved compatibility over hydrocarbon solutions, but while having a similar glass transition temperature," he said. "What this gives is a better formulating window to our customers and an opportunity to go with the higher performance of the tread compound."

    Kraton also has spent a lot of research and development effort to develop a proprietary model to scan the compatibility of its Sylvatraxx resins with various compounds, which Derville said allows it to predict the performance of the end compound.

    "This is very useful to ourselves and to our customers in terms of accelerating the high formulation work that is required for the selection of resins and really work at scanning all resins to get faster to the desired compound performance," he said.

    While there is competition in the market, Kraton always fights to maintain a leadership position in the materials it produces, Derville said. "Kraton is guided by core values, which include integrity, safety, verve and creativity in relationships," he said. "We work with customers to enable the solutions they need for tomorrow's tire. That's what drives us, and we like to think that we're the right supplier for our customers in that sense."

    Growth for TEA resins has been strong, especially in Europe and Asia but also in North America. "Like any market, it's competitive," Derville said, "but I fundamentally believe that TEA resins, and specifically Sylvatraxx resins, have a great future because it meets underlying fundamental requirements from the consumer, which are not going away."

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