Fernando Turner
View from the Top

Exhaust Industry Crucial to Emissions Reductions

Mon, 09/01/2014 - 12:45

Q: What role do Katcon’s catalytic converters play in helping companies meet emission reduction standards?

A: Levels of carbon dioxide, nitrous oxide, and hydrocarbons are regulated in most countries in Europe as well as in the US and Japan. The laws and programs governing the emissions regulations are launched years before they will actually be enforced. For example, by 2020, international standards say that carbon dioxide emissions have to be reduced to 90g/ kg. Many of the international emissions standards currently in force mandate levels around 180g/kg, so we do not know how we will accomplish the 2020 goal but we have six years to figure that out. This project obviously involves a wide range of efforts for the automotive industry, ranging from reducing weight and improving energy efficiency to trying out different alternative fuels and modifying engines. Katcon is currently applying two different technologies: one is a catalytic converter for gasoline engines and the second is diesel technology. We are designing our own solutions but we also rely on guidance from our clients, such as GM that has a number of experts on these topics.

Q: How does your R&D center in Monterrey contribute to Katcon’s global operations?

A: Katcon’s research and development is done in collaboration between all its centers, but most of our big conceptual engineering ideas come from Europe, the US, and Australia. Monterrey has a big portfolio of five projects that are all in different stages of development; some of them are just getting started while others are getting funds through bodies like CONACYT. One project that will become a technological spin-off of Katcon is focused on carbon fibers and other advanced materials. This project is getting support from the government as carbon fibers will be needed for aerospace, sports equipment, boats, and other industries. Our second project is an active valve which will be smaller, cheaper, and much lighter than a muffler, which is being supported out of our Michigan plant. The Monterrey center has made the prototype and placed it in engines for testing. Our third project is to make the exhaust system lighter through different welding processes and materials. This is important to meet carbon dioxide emission reduction targets. Our fourth project is to design products for heavy duty diesel vehicles. Finally, we are working on tuning development, which is the sound of the exhaust system. Tuning is going to be essential in hybrid cars that run more silently. For safety purposes, a car needs to sound as it would with a combustion engine.

Q: When you acquired Delphi’s catalytic converter business, how did you integrate its technology and innovation?

A: We were ready to take on that role. We knew that managing its technology would be challenging but not impossible. It was challenging as we wanted to take that innovation forward in an opposite way to how Delphi was doing it. We thought Katcon should be more nimble, flexible, and frugal but you cannot take risks in the automotive industry. It is not enough to believe that an idea is good; it has to be thoroughly tested. The process for testing technology is very conservative and has not changed much in years because people do not want to take risks. We would like product development, particularly testing and validation, to be simpler, quicker, and cheaper but it is not easy to achieve this. We can be certain that a new product is going to work on a computer by running software that tests temperature, vibrations, and flow but the customer wants us to build prototypes in order to see the real materials, for the product to be put inside in a real car, and have the car undergo testing in various conditions.

Q: Do your development strategies revolve around acquisitions or organic growth?

A: The exhaust industry has been consolidating, and big companies are merging in the largest and most traditional automotive markets like the US, Japan, and Germany. Our position in 2009 placed us on the map outside Mexico and Venezuela. Katcon may be small compared to global players but it is present on all the continents, with 12 to 15 solid global clients and an additional 15 in China. We are perpetuating our business with existing clients, products, and plants. On the other hand, we also seek to acquire businesses in the whole spectrum of the exhaust emission industry. We have been pursuing this strategy for over a year now and we are looking at a wide range of companies from sales and engineering to manufacturing in both gas and diesel.