“Specialized materials and applications for the automotive industry and beyond”
Innovation as the best strategy for sustainable growth
INTRODUCTION
Good morning … it’s great to be back in Canada where I’ve spent 15 of my 22 years with DuPont here in Canada, and lived in the Toronto area for five of those years. I have had the pleasure of attending many Plast-Ex shows, but this is my first opportunity to speak at a Plast-Ex conference.
It’s great to be involved in the 50th anniversary of event … and I want to congratulate Serge and the CPIA team who continue to deliver this important venue for the Canadian Plastics Industry.
My specific topic this morning is “Specialized materials and applications for the automotive industry and beyond”; and I will talk about two specific products that we’re bringing forward
However there is a subtitle – which is perhaps more meaningful and is actually the primary focus of my talk – and that is: “Innovation as the Best Strategy for Sustainable Growth”
My intent today is not to give you a general business “pep talk” about common business issues like globalization, diversification, or segmentation. These are important topics and there are many consultants willing to help you (and charge you for the help) in these areas.
Rather I am here to talk about what I know… that is, how a 200 year old global, science, company has continued to be a viable business entity despite centuries of changing market dynamics. Of course, there are many reasons for this … strong core values, strong leadership, manufacturing know-how, etc. But I’m going to focus on what we believe is key to sustainable growth… namely, Innovation.
INNOVATION = SUSTAINABLE GROWTH
To illustrate the importance of Innovation over time… Let’s pick a point in time to start … let’s not talk about centuries or decades, let’s consider what’s gone on since our last Plast-Ex three years ago … think for a moment about the changes
· sharp increases and fluctuations in raw material costs,
· Intensified global competition and global pricing strategies,
· mergers, consolidations, bankruptcies,
· over capacity (our customers) … under capacity (our suppliers)
All in all, it’s been pretty difficult to focus on what it truly takes to win in this current business environment. In our industry, some plastics suppliers, facing the wave of global industry consolidation and commoditization pressure have reacted by cutting back value added services. Others have backed out of certain businesses, shut their doors, or spun off divisions … It’s been a time of turmoil and confusion. How are we trying to deal with this? At DuPont we’re working consciously to reinvent ourselves through Innovation… In the Engineering Polymers business, we have a history of this… for example…
· During the 40s through the 60s, we were fundamentally a materials innovator
· From the 70s to the 90s, we specialized in application development
· Today, our focus is, what we call “Customer Driven Innovation”
Specifically in the Materials innovations area, we are pursuing a range of sustainable products that will meet the needs of current and future customers. So, our approach is to stick with our core historical strength of Innovation and apply it in ways that are consistent with our company’s mission of Sustainable Growth
SUSTAINABILITY
Before sharing with you some of the early results of this work, let me talk for a minute about what we mean, when we say “Sustainability” or “Sustainable Growth”. From a corporate perspective, DuPont is committed to the concept of sustainability. That’s our corporate Mission. Our definition of Sustainable Growth as a Mission is; “The creation of shareholder and societal value while we reduce our environmental footprint along the value chains in which we operate”. In line with this, we’ve recently created a new set of Sustainability Goals for 2015 that renew and expand our commitment to sustainability and sustainable growth. As you will see, they go beyond traditional footprint reduction to include goals that tie our business growth even more directly to the development of safer and environmentally improved products.
• New to our goals in 2015 are what we call our market-facing goals. Specifically, by 2015,
DuPont will double our investment in R&D programs with direct, quantifiable environmental benefits for our customers and consumers along our value chains.
• We plan to grow our annual revenues by at least $2 billion from products that create energy efficiency and/or significant greenhouse gas emissions reductions for our customers.
• DuPont will nearly double our revenues generated from non-depletable resources to at least $8 billion.
• And we’ll increase the amount of R&D spent on developing and bringing to market new products that will protect people from harm or threats. This means that between now and
2015, we will introduce at least 1,000 new products or services that help make people safer globally.
INNOVATION/SUSTAINABILITY IN EP
So with that backdrop, we, in the Engineering Polymers business are reinventing ourselves again through INNOVATION in line with our company’s mission of Sustainable Growth
Why is it important to reinvent yourself? Well, in the immortal words of that sage Bob Dylan - “If you’re not busy living, you’re busy dying.” There is no in between.
Our VISION for the DuPont Engineering Polymers business …“To be the number one materials solution supplier to the world's leading companies”… we believe we can accomplish this by having....
· The right product portfolio (relevant products)
· Global capabilities to serve our customers
· Reliable quality and supply… along with a robust
· Innovation Engine (technical/development know how)
Again, the key for us, we believe, is INNOVATION.
We are challenging ourselves to pursue “Customer Driven Innovation” as we believe that, and this is especially true in automotive … that INNOVATION…… ultimately delivers the “Lowest Total System Costs” which is the over-riding customer need in automotive.
THE PRODUCTS
So what specifically are we doing in this area of Innovation aligned with Sustainability?....Let me focus on the “Materials” point of the INNOVATION Triangle…
Currently, the vast majority of our product line is based on polymers produced from fossil fuels.
With these polymers, we continue to work with our customers on all three points of the INNOVATION Triangle to deliver the attributes they require, such as... reduced weight, improved performance, and low cost integrated part solutions. This work in, and of itself, supports the concept of Sustainability. However, we believe we can enhance these efforts even further by introducing bio-based polymers into our portfolio of products.
We have launched a new technology platform – DuPont Biobased Materials. This platform will focus on using feedstocks such as corn as the building blocks for multiple end products including fibers, fabrics, automotive parts, connecters and consumer goods.
DuPont Engineering Polymers will launch two new bio-based products….
§ SORONA EP polymer - polytrimethylene terephthalate based partly on bio-based feedstocks
AND
§ HYTREL RS - Renewably Sourced thermoplastic polyester elastomer
One of our first steps in the building of our Biobased Materials Platform was to form a
partnership with Tate & Lyle. “DuPont/Tate & Lyle bioproducts LLC”, is a joint venture between DuPont and Tate & Lyle.
We started the first large-scale industrial production of Bio-PDOTM at the Loudon, TN facility
in 2006 and commercial quantities of Bio PDO are currently being shipped. The production of Bio-PDO™ consumes 40 percent less energy and reduces greenhouse gas emissions by 20 percent versus petroleum-based propanediol. Production of 100 million pounds of Bio-PDO™ will save the energy equivalent of 10 million gallons of gasoline per year, or enough to fuel approximately 22,000 cars annually.
The new products – DuPont™ Sorona® EP polymer and DuPont™ Hytrel RS, both based on renewable resources – are to be made with a Bio-PDO™ monomer derived from corn sugar using a patented and proprietary fermentation process as a replacement for petrochemical based feed stocks.
How does this work? – well, corn is harvested, we extract sugar/glucose from the corn, through a fermentation process, the glucose is converted into a monomer (PDO), the monomer (PDO) is then polymerized with TPA and this becomes Sorona polymer. In the case of Hytrel RS, Bio PDO serves as a building block and is polymerized to make Hytrel RS.
These processes lower the environmental footprint when compared to petrochemical based processes, specifically;
• As I mentioned before, Bio-PDO™ consumes 40% less energy than chemical PDO.
• The making of Sorona® results in 50% less greenhouse gas emissions than nylon.
• Sorona® consumes 40% less energy than nylon.
DuPont™ Sorona® polymer and Hytrel® RS will be available in late 2007.
Let’s talk a little more specifically about SORONA. The new Sorona EP will be a hybrid polymer, with about 37-40 percent of the content derived from renewable resources. We believe we can go up to 50-60 percent with some of the technologies that we are currently pursuing.
The new Sorona ® polymer will provide similar performance characteristics to PBT…
• Good stiffness and strength (similar to PBTs)
• Better surface appearance and gloss (than most PBTs)
• Comparable toughness to PBT
Target markets are automotive, appliances, consumer goods and connectors. Customers are
testing the materials now. Commercial launch is expected before the end of the year. No new investment in equipment or tooling is required to use the new Sorona EP polymer.
Our goal is to provide products at prices that customers can afford – that is, these products need to be both environmentally and economically sustainable.
Let’s talk a little more specifically about HYT RS. Some of you may already be familiar with our family of Hytrel products. Hytrel ® is a thermoplastic polyester elastomer designed to bridge the gap between rigid plastic and rubber. HYTREL’s uniqueness comes from the polymer which contains alternating hard segments and soft segments …
Into this family we will be introducing a new HYTREL... Hytrel RS. HYTREL RS will have
Bio PDO as a building block. The Bio PDO will be polymerized to replace the petrochemical based polyethers in the Hytrel® soft segments.
The physical properties of HYTREL RS will be very comparable to the current oil-based HYTREL. Biomaterials will vary from 35 percent to 65 percent of the compound, depending on the grade.
Both Sorona polymer and Hytrel RS will be making their contribution to sustainability through
their lower environmental footprints compared to petrochemical based polymers. Unlike many currently available ‘renewably sourced’ plastic materials, these two RS polymers are functional high performance engineering plastics.
Again, Sorona EP Polymer and Hytrel RS will be commercial in late 2007.
So these are the first couple of the “specialized materials” emerging from our INNOVATION
ENGINE, driven and aligned with our SUSTAINABLE GROWTH Mission, for use in the auto industry and beyond. However my main message today is, YES, the products are important, but we think that the best bet for DuPont, and perhaps your company, to remain viable (sustainable) now and into the future is to nourish YOUR Innovation Engine in a way that takes its direction from both the market/customer needs and is in line with your overall mission – in our case, that’s “Sustainable Growth”
Thank you for taking the time to be here this morning… Thanks for listening… and I hope you have a great week at Plast-Ex….