New business model for specialty plastics
* Products accompanied by new ancillary services
* Target: 20 percent of sales revenue via innovations
BASF has a new marketing model for specialties in its operating division for styrenics. The company’s new global business unit Specialty Polymers & Specialty Foams brings together products which have particular properties that distinguish them from high-volume standard plastics. These products are supplied together with ancillary services. The unit includes thermoplastics such as Terlux® (MABS), Luran® S (ASA), Terblend® N (PA/ABS), Terluran® HH (high-temperature ABS) and Styroflex® (SB), and also the specialty foams Basotect® (melamine resin foam), Neopolen® (EPP, EPE) and Palusol® (alkali silicate sheet). The product line also includes the biodegradable materials Ecoflex® and Ecovio®.
Result of a customer survey
“I don’t go to McDonalds for a candlelight dinner,” is how Dr. Michael Stumpp, who heads the business unit, explains the idea behind the new specialties business model. BASF undertook a customer survey to establish the types of service and other additional features needed by processors of specialty plastics if they are to achieve success in their markets. The result: whereas standard plastics require a compact product line that can be produced at low cost, the four key factors in the marketing of specialties are innovation, partnership, reliability and diversity. “The products often differ considerably in terms of their chemical composition and their uses, but what specialty foams, specialty plastics and biodegradable materials have in common is that they give customers an additional advantage, extending beyond on-time delivery of high-quality pellets” says Stumpp. “And this is the key to long-term success.”
Global business and growth requirement
Unlike standard plastics, specialties are showing average yearly growth of at least eight percent. Much of this growth derives from the Far East, so BASF has set up the new business unit on a global basis, with a 10 percent target for annual growth of its products. This growth in the market is to be accomplished by combining these materials with industry-specific service packages, technical support, or specialized colors. The aim is that the entire package will always help customers to achieve a significant system-cost saving.
Key factor one: Innovations
The concept regards innovations as either new products in existing applications or existing products in new applications. For example, BASF recently began marketing of the first plastic based on renewable raw materials - Ecovio. Ecovio is composed of two completely biodegradable components: Ecoflex and polylactic acid (PLA). The source of PLA is the renewable raw material maize (corn). The main advantage of Ecovio is that the material is ready-to-use, so customers can use it directly for extrusion of biodegradable films - with no need for any extra blending or preparation work.
In another innovation, Basotect foam - previously mainly used for soundproofing - is now being used as a cleaning material. And the IR-absorbent version of Neopolen foam won a design prize for BASF customer Besto for its use in a new generation of water heaters. Specialties are mainly used in innovation-driven markets, so the business unit intends to achieve 20 percent of its sales revenue through innovation.
Key factors two and three: Partnership with customers and reliability
The PermaSkin® system is an example of successful customer collaboration right through to the final product. BASF worked with the English technology company Permacoat to develop a low-cost production method for architectural components such as wooden doors: instead of the lacquering process, the component producer can laminate the components with a film composed of high-tensile-strength Luran S, therefore eliminating the complicated painting step. In this case BASF does not just supply the Luran S but also markets the entire concept in collaboration with its four partners.
For the specialties unit reliability means not only consistent product quality but also a high level of technical service, and long-term supply agreements - for example for the highly specialized Palusol fire-protection sheet. BASF was honored with Gillette’s 2004 supplier prize for its Luran S coloring service, because the Ludwigshafen company is unique in providing uniform color standards worldwide.
Key factor four: Diversity – The industry approach
The diversity of products and services makes BASF’s specialties valuable across entire industries. An example is the product line available to car manufacturers, which includes not only the specialty thermoplastics Luran S, Terluran HH and Terblend N for interior and exterior applications but also the specialty foams Basotect and Neopolen, which contribute to applications under the hood in relation to soundproofing, energy absorption, and for pedestrian protection. The new business unit will not only combine a wide variety of products but will also provide BASF’s extensive expertise, thus increasing value for customers. But the car industry with its strong global growth is not the only sector where the business unit sees its products as major participants. Another area of interest is the high growth level of the worldwide construction industry. And a specific service package has been devised for transparent products in medical technology.
PlasticsPlus: The new generic trademark
The generic trademark PlasticsPlus has been introduced by the new business unit for its products with the aim of giving a recognizable face to the comprehensive range of products and services available from styrenics specialties. This trademark is intended to demonstrate that the experts and products behind PlasticsPlus represent a particularly high level of innovation, partnership, reliability and diversity.
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