Developing Innovative Ideas, Creating New Markets
Asahi Kasei Expands its European Headquarters in Düsseldorf into the Innovation Center of the Materials Division
CHEManager: With the establishment of the European headquarters in 2016 Asahi Kasei set ambitious goals to expand its European activities. Has your growth strategy worked out, have the goals been achieved?
Hideki Tsutsumi: The establishment of Asahi Kasei Europe in 2016 was an important cornerstone of the company’s mid-term plan "C's for tomorrow 2018", where we decided to strengthen our activities on the European market. Our main goal is to triple the global turnover until 2025. To achieve that, the European market – and here especially the automotive industry - will play an important role. I clearly remember when I came to Germany in April 2016 – only half a floor was occupied at that time. In these five years we have come a long way and established strong connections to the European automotive manufacturers. So yes, our strategy is on track.
The focus of your European activities is on the Materials business area, which supplies materials solutions in particular to the automotive industry. How has the structural change in this industry affected your business?
H. Tsutsumi: The automotive industry is currently undergoing a major evolution. The traditional supply structure from Tier-3 up to the OEM is breaking up and becoming much more dynamic. Mobility itself is changing, and so are the needs towards vehicle features of a connected society. For car manufactures trying to differentiate themselves within a complex world, convincing and positively surprising end users is a major effort. This cannot be solved top-down but rather requires a dynamic and open exchange within the entire ecosystem. Because of tightening environmental regulations and changing end user needs – also directly connected to the COVID-19 pandemic - new materials and innovative solutions for the drivetrain but also the automotive interior are in high demand. While this dynamic development is of course challenging for the whole industry, we see it as a huge chance, as Asahi Kasei is providing a broad range of solutions to the automotive industry, from synthetic rubber for fuel-efficient tires and high-performance foams and separators for automotive lithium-ion batteries, up to electronic components such as audio D/A converters and gas sensors, ensuring crystal-clear premium sound and safe air in the vehicle cabin. With this wide product range under one roof we are in the position to bring new perspectives, system integration opportunities and synergies among various materials and technologies to the table.
"It is still valid to say that Europe and Germany are the pacemakers of the global automotive industry."
What are the most important trends in the automotive industry that AKEU can serve with innovative technologies?
H. Tsutsumi: During the last decade, a lot of efforts have been spent on and around the transition towards the electric drivetrain. For sure this journey will continue, but it is no news that these days it takes much more than an efficient drive train to excite and convince drivers to select a specific car. The automotive interior has been a major topic in the past years. While public transportation was suffering from COVID-19, the private car has become more important again, especially in the sense of being a shelter of safety and comfort. This was also a result of our last survey, Asahi Kasei Europe conducted at the end of 2020 in the four major automotive markets Germany, China, US, and Japan: The automotive interior is becoming increasingly important and the ongoing pandemic is adding a new layer to this already very complex topic. Worldwide car users are looking for sustainable surface materials that are easy-to-maintain and ideally offer antimicrobial properties. In addition, the need towards concepts and technologies that contribute to clean and safe air inside the cabin, unpleasant smells or drastically reduced noise while driving or is also on the rise. The latter will gain relevance along with the increasing switch towards BEVs.
Have you been able to use Asahi Kasei's innovative power to leverage business with European automakers and take market share from other materials manufacturers in Europe?
H. Tsutsumi: While this is definitely our ultimate goal, it is too early to say. We are talking to all the major European car manufacturers and we are experiencing that with our unique portfolio we are well positioned and addressing key pain points of our customers. Generally speaking, the market is highly dynamic with new features and applications continuously emerging. So it might not only be a question of taking shares, but rather of creating new markets.
What role did the opening of AKEU's R&D Center at Chempark Dormagen in 2017 play?
H. Tsutsumi: We entered the European market in 2016 with the clear mission to strengthen our partner network also by establishing local development and technical service. The opening of the R&D Center in Dormagen was the logical next step to set up the necessary infrastructure to achieve this. It is Asahi Kasei’s first and only R&D Center outside of Japan – and a very strong commitment to the location Germany.
Now you are consolidating the business functions and R&D activities at the new European headquarters in Düsseldorf harbor. What do you expect from this?
H. Tsutsumi: I already mentioned the R&D Center being the first and only outside of Japan. By consolidating all functions at Düsseldorf harbor, we are the only Asahi Kasei entity worldwide, where sales, marketing, logistics, technical support, and R&D are united in one single location. The pandemic has taught us that remote work is possible and effective, but we still strongly believe that synergies and innovation can only fully unfold in direct physical interaction among the teams. Our diversity is unique and has been proven to be a source for creative and occasionally disruptive ideas. The new office spaces will further foster the cross-divisional communication within Asahi Kasei Europe, but also the cross organizational communication with other European Asahi Kasei Group companies. Naturally, this will also be of great benefit to our customers.
"For us, it's not just about gaining market share, but also about creating new markets."
The European automotive industry is still strong, but many technologies are now being developed in Asia. How important is the exchange with your researchers and development engineers in Japan for your European business?
H. Tsutsumi: Our automotive teams worldwide are in regular and close exchange with the colleagues in Japan, where indeed the major share of research and development at Asahi Kasei is conducted. While production and development shifted to Asia and other regions in the last decades, it is still valid to say that Europe and Germany are the pacemakers of the global automotive industry, in terms of decision making, as well as overall trends and regulations. The pure proximity and direct exchange with the key players of future vehicles and mobility is generating significant momentum. By locally connecting with the industry, we recognize new trends and try to open new doors for the immense product and technology pipeline we have in Japan. The strong information exchange with the teams in Japan is obviously essential in creating new opportunities and eventually achieve our goals.
What are your future market expectations in Europe, what challenges do you have to overcome?
H. Tsutsumi: I already mentioned the ongoing evolution in the automotive industry. This whole process is going to accelerate even further. For the OEMs this means that they will need to find the right balance between differentiation with features which allow individualization towards the end user on the one hand, and simplification of systems and its variants under consideration of platform thinking and upgradability on the other hand. The end user’s needs are quickly changing, and so are the emerging demands of perceived quality and luxury.
Thoroughly understanding the end user’s needs and providing the right features for the right price will be a key challenge for the industry. Smart ideas which are specifically designed around consumer’s pain points are an essential element. To keep the pace in modern world means we have to enhance our forward looking towards what is coming tomorrow and the day after. This is one reason why we are frequently conducting end consumer surveys regarding automotive trends like interior and share those with our partners.
For us as a supplier the biggest challenge is to stay on top of market dynamics. With the traditional structures coming to their limits and the development cycles accelerating, we are trying to find answers and solutions to these challenges together with our customers and partners.