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Chuck Dana, President of Owens Corning, provided a presentation to the composites industry at the ACMA 2005 Composites Show in Ohio on Thursday.
Dana, President of Owens Corning, the company that invented glass fibre, provided pointers on what companies operating in the composites industry should do to survive and prosper.
Introducing Owens Corning by examining the companies’ history, Dana illustrated the threats and challenges that concern all corners of the industry, and that these must be overcome for the individual companies – and the industry – to thrive. Frequently interchanging from the I to the collective We, Dana shows how issues in the industry such as resin and raw material price increases, economic developments in China and other world issues need to be jointly addressed by the industry and not one particular or singular body.
To this end, he highlighted 8 things that the industry must do:
1 – Act with speed and focusin bringing new products and solutions to your markets and your customers. Adding that “If you’re about cost, be about cost. If you’re about innovation, be about innovation…don’t get caught in the middle.”
2 – Don’t build your business on life-cycle costs.
“Technology is continually driving things to be faster, lighter, and cheaper – think laptops. The lifecycle cost you should be concerned about is the life-cycle of the purchasing agent in the position.”
3 – Focus on customer intimacy and innovation.
“The price in the market IS going to move to the lowest cost value chain – where ever someone is smart enough and committed enough to find a way to change the game…And this information chain, is making products, every where, better. “
4 – Find the lowest cost way to reinvent the value chain to serve customers.
“If you don’t, others will do it for you and you won’t have a place in the value chain. Don’t bet on low quality from emerging markets to maintain your competitive advantage; they’ve proven to be worthy competitors.”
5 – Move or partner with global players to expand for growth and succeed globally in the long term.
”If you don’t, you risk missing opportunities, you risk being replaced, you miss leveraging the power of a partner’s global reach, knowledge and access”
6 – Go green or go home.
“A key component of the trend toward green is legislation. Here and around the world, our governments are focused on helping their countries make decisions that they hope, will allow one generation to move ahead without jeopardizing the future of the next.” Adding that the recent Energy Bill in the US has huge potential for composite companies, pointing to wind energy as just one example.
7 – Transportation is hot, infrastructure and construction markets are industry growth engines we can’t ignore.
“Transportation is hot, but infrastructure and construction markets are industry growth engines you can’t ignore.”
Dane then made some introductory but detailed remarks about the development and growth of carbon fibre and glass reinforcement stating that, carbon or aramid reinforcement volume consumption won’t overtake glass reinforcement usage for two generations. Adding that the glass reinforcements market is 80 times as large as the carbon market worldwide – 4 billion pounds vs. 50 million pounds:
“But that doesn’t mean the market isn’t changing, and fast. While smaller, the carbon market is growing at roughly 2 times the pace of glass – approximately a 10% compound annual growth vs. 5%. And aramid fibres are picking up speed, with growth rates similar to that of carbon. Right now, worldwide aramid fibre use is estimated at 1/40th of the glass market. But while approximately 33% of all glass and carbon reinforcements are consumed in the Americas annually, Asia leads the carbon consumption at 36% of the global demand. Only 3 of 12 major glass producers lie within the AP region, but nearly half the carbon fibre producers are located in Asia Pacific.”
Dana then turned to his eighth and final point:
8 – Don’t forget who the real competition is – steel, wood and aluminium.
“It doesn’t matter what reinforcement or matrix you use…Ask yourself, are you beating steel, wood and aluminium?…And know that they face their own challenges in this changing market. Wood manufacturers certainly face environmentalists and steel and aluminium suppliers are finding ways to be lighter and stronger – making that a constantly moving bar for us to watch.”
He made some final points on the challenge being made to integrate composites into new applications and expand its uses, asserting that this opportunity is there for all the industry.
He finally thanked the role that ACMA plays “…ACMA helps all of us respond to the demands placed on today’s composites professionals and I encourage all of you to get involved with and take advantage of this group as a key resource and voice for our industry.”
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