Strategy & Management

Material Solutions for the Automotive Industry

With a Focus on the Automotive and Environmental Industries Asahi Kasei Takes on Europe

02.04.2018 -

Following the founding of Asahi Kasei Europe (AKEU), based in Düsseldorf, Germany, and the opening of a European R&D center in Dormagen, Germany, the Japanese chemical company has built on its marketing and sales activities. The newly designed Asahi Kasei Europe exhibition center at the European headquarters demonstrates solutions for the world of tomorrow developed by Asahi Kasei and presents the materials manufacturer’s products and technologies for the automotive, medicine and health, renewable energies and lifestyle markets. According to Asahi Kasei Europe president, Hideki Tsutsumi, the company aims to grow in Europe by providing value through collaboration and synergies.

CHEManager: Mr. Tsutsumi, Asahi Kasei Europe was launched in order to accelerate the business expansion in Europe. What is your ambition and what are your goals in Europe?

H. Tsutsumi: AKEU was established in April 2016 and is the operational headquarter for the business activities of the Asahi Kasei group in Europe. AKEU will focus on the automotive and environmental industry. In 2016 we published our mid-term plan "C's for tomorrow 2018", where we decided to strengthen our activities on the European market. We are aiming at tripling the global turnover until 2025. To achieve that, the European market will play an important role.

The main focus of our activities in Europe lies on the expansion in the European automotive industry. Asahi Kasei provides a broad range of products and technologies and we believe that our sustainable products perfectly match the needs of the European automotive industry. Besides the automotive industry, we also provide products and technologies for other industries, for example electronic products like sensors, fibers for the textile industry or electrolyzers for hydrogen production, a technology we expect to be in high demand in the coming years.

You took over as managing director of Asahi Kasei Europe in spring of 2016. After two years, what is your brief summary?

H. Tsutsumi: The first 2 to 3 years are very important to set up the right base for expansion on the European market. With AKEU as the connecting operational headquarter all the different divisions such as Engineering Plastics, Synthetic Rubber or Coating now work closely together under one roof. Our R&D center in the Chempark Dormagen, launched in October 2017, is focusing on engineering plastics, as well as on coating and rubber technology. All this increases the synergy effects within our European business significantly.

Since our start in April 2016 we significantly increased our sales and technical support team and also welcomed new colleagues from other businesses, as for example our Clean Energy Team, which will be responsible for the electrolyzer technology to produce green hydrogen.

As Europe is a mature market with low one-digit growth rates, business expansion in most sectors means crowding out existing suppliers. This holds true also for the automotive industry, which is a key customer market for AKEU. What is your strategy to expand this business in the European market?

H. Tsutsumi: Regarding the automotive industry, one key advantage Asahi Kasei has to offer is the broad range of highly innovative products and technologies, from lightweight, high-performance plastics and battery separators to rubber and sensors for tires and textiles for the car interior. So we are providing the whole package, all from one single supplier.

Besides that, the shift in powertrain technology to electric vehicles and also the CO2 reduction targets the car manufacturers have to achieve in the coming years are already changing the market and its needs. Europe is also the most important market in terms of regulations for the environmental industry. We are a leading company in key technologies fitting these changing needs, such as separators and high performance plastics for lithium-ion-batteries used in electric cars.

A customer could think about bringing a new materials’ supplier in for several reasons, be it price, trust and reliability, quality, reputation or innovative strength. Where do you see AKEU’s core competences and qualities?

H. Tsutsumi: Our strength is the combination of all these factors. Our goal is to always strive for new innovations while worshipping our 96-year history. We are always thinking ahead, thinking of how we can provide the best solutions and advanced technologies to the markets, and we have proven that in the course of our history.

Research & Development is a cornerstone for innovation. In October 2017 Asahi Kasei opened a new R&D Center in the Chempark Dormagen. What is its function and focus, how will it support your growth strategy?

H. Tsutsumi: The main focus of our R&D center is strengthening the technical customer support in Europe. Besides that, we aim at developing new product grades and applications for the European market. We want to achieve that by closely working together with European companies and universities and by continuously expanding our network.

Innovation is key to growth for chemicals & materials companies. How can Asahi Kasei compete with European chemical companies in terms of innovative capacity?

H. Tsutsumi: Asahi Kasei is an innovation-driven company. Our group slogan is: "Creating for tomorrow". We always aim at creating completely new products and technologies to contribute to society. Providing solutions to reduce energy consumption and CO2 emission is our contribution.

We can rely on a strong worldwide R&D network and are proud to say that we can look back on an impressive list of market changing revolutionary inventions, such as the lithium-ion battery and the electronic compass.

I believe that especially for the automotive industry we provide sustainable products that perfectly match the current and upcoming needs of the automotive industry, such as eco-friendly, intelligent tires, which lead to CO2 reduction and lower fuel consumption. We also provide engineering plastics for lightweight components as well as other components for electric cars, as for example battery separators for lithium ion batteries.

Besides the automotive industry, we provide electrolyzer technology to produce hydrogen from electric power. Hydrogen can be used to store energy and can further be transformed into alternate fuels.

Asahi Kasei is working on many innovation projects like the Hydrogen initiative or the AKXY concept car. What are your plans and milestones regarding these projects?

H. Tsutsumi: The automotive and energy industries will be two main growth drivers for Asahi Kasei's business in Europe. With our concept car AKXY, which incorporates 27 products and technologies by Asahi Kasei, we show our cross-divisional strength and innovative power for the automotive industry. We are proceeding with the preparations to present AKXY to customers in Europe.

We started to intensify our activities in the hydrogen field and are aiming to expand this business in the future. The field of environmental business needs high-level technology and we think that this is exactly our strength we can put to use. The hydrogen business is one promising solution to problems such as global warming and air pollution. That is why we are strengthening our activities in this business area.

Currently, we are proceeding with the set-up of an alkaline water electrolysis system demonstration plant within the Hydrogen Application Center in Herten, Germany. The plant is scheduled to start operation in April 2018, producing hydrogen from wind energy.

Also in April 2018 we will exhibit our technology and solutions at the Hydrogen+Fuel Cells+Batteries at Hannover Messe, which will give us the opportunity to further increase and deepen our network in this industry.

It was announced recently that AKEU is participating in the three-year multi-partner ALIGN-CCUS project. What is the goal of this project and what will AKEU contribute?

H. Tsutsumi: The ALIGN-CCUS – short for: carbon capture, utilization and storage – project is a partnership project which runs from 2017 to 2020 and consists of 34 research institutes and industrial companies from five European countries. The project received €15 million funding from the European ERA-NET ACT fund and aims at transforming six European industrial regions into low-carbon centers, mainly by optimizing and reducing the costs of carbon capture technologies as well as developing the use of CO2 in energy storage and conversion. Asahi Kasei participates in Work Package 4 for large-scale energy storage and conversion. We provide an alkaline water electrolysis equipment to produce hydrogen. Together with CO2 captured at power plants the hydrogen can be transformed into fuels such as methanol and dimethyl ether. This system can be scaled-up and has high energy exchange efficiency.

Asahi Kasei has an operational strength to integrate different divisions. What is your special success factor regarding this?

H. Tsutsumi: Nowadays, interdisciplinary approaches are key factors for success. It is difficult to provide solutions to the customer just from one viewpoint. Asahi Kasei is active in a great variety of businesses. Bringing specialists from different fields together and let them develop an interdisciplinary solution to the customer's problem is our strength.

Take the tire business, for example: Our synthetic rubber, fiber and sensor divisions work closely together to provide the best solutions for the tire industry. Our tread wear sensors enable real-time tire wear monitoring and our Leona 66 nylon filament has a superior adhesive property with rubber.

Another example is the use of our fiber technology for medical devices. Asahi Kasei's first business was with fibers. Nowadays we use our hollow fiber technology also for high-level virus removal filters and dialyzers.

Your growth objectives for 2025 are quite ambitious: to triple your sales to more than 2 billion €. What makes you confident that Asahi Kasei will reach this goal?

H. Tsutsumi: Surely, the automotive industry will be the main driver for us. The car manufacturers will have to apply new technologies to reduce the CO2 emissions and to adapt new powertrains. Our solutions perfectly match these needs.

In the field of environmental technology Germany's drop-out of nuclear power will be a big step. Renewable energies and storage technologies will get more and more important. Our electrolyzer technology to produce green hydrogen perfectly addresses these changes.

Why did you decide for Germany - a country known for comparably high labor costs, strict regulations, and long approval times when it comes to investments - as home base for AKEU? What factors did you consider when choosing Germany as the location for your European headquarters?

H. Tsutsumi: Regulations in Europe and Germany are very strict. That makes this market very challenging, but also very attractive. Germany is the main driver for developments in the automotive industry, as for example for powertrain technology. There will be a great shift to electric and hybrid vehicles in the coming years. Concerning powertrain and lightweight technology, we have very strong products. That is why we chose to set up our European headquarters in Germany.

Especially for the automotive industry, the European market is the most important market regarding environmental regulations. Regulations from Europe are also often adapted in other markets such as China. The car manufacturers have to react to these changes in regulation.

Besides that, all of the German car manufacturers have production facilities in China and other Asian countries, so all the European regulations will also be applied in these countries. Getting a foot into the door of European automotive companies opens up doors worldwide. In that respect it is very important for Asahi Kasei to be close to these changes and to car manufacturers. By that we hope to expand our business from Germany to the rest of the world.

Also in the field of renewable energies, Germany is the leading country. But there are serious challenges, especially regarding storage technologies. Asahi Kasei provides electrolyzer technology to produce hydrogen from electric power. This technology is one solution for the energy storage issue.

What are your growth plans for Europe in terms of number of offices and employees?

H. Tsutsumi: We are still setting up the base for expansion here in Europe. The number of employees in our headquarters in Düsseldorf and at our R&D center in Dormagen has been increasing gradually and will further increase within 2018. We are now considering the set-up of a plastics production facility in Germany. This will enable us to react to our customers' needs more quickly and flexibly.