Unified Front for Sustainability

Q: What benefits do you expect to reap by merging Henkel’s North American and Latin American businesses and what will that mean for your automotive operations?

A: It did not make sense for the company to manage North America and Latin America as separate entities because our customers work across the entire region. We decided to align our company to the way our customers do business, which will also represent a positive change for our automotive operations. We have invested heavily in R&D, sales and development in the US and Canada and now Mexico will benefit from our expertise across all business divisions.

It has been difficult to merge resources and technologies across different countries but it is a crucial process to maintain the value of the company. We want to remove all redundancies and barriers while sharing our knowledge. The human factor is also a priority for Henkel. We believe in diversity and having people who speak different languages and are from different backgrounds leads to innovation and agility in our processes and to new business. This transition will help us target new markets.

Q: What role will Mexico and the newly established Americas region play in Henkel’s 2020+ strategy?

A: Mexico is a key piece of the 2020+ strategy and one of Henkel’s main regions in the company’s automotive business. The forecast calls for vehicle production to grow 33 percent from 2016 to 2020 in Mexico. We have already invested in the past with multiple plants but our goal is to keep growing our presence. Only in 2016, we opened a new plant focused on production of sealants for the automotive industry in Salamanca, Guanajuato. We are also investing locally in our equipment, expertise and our people. Our goal is to provide a strong technical customer service to all companies. We are constantly looking for a way to optimize our resources and to narrow the gaps in our processes. We  need to develop new marketing and sales strategies as well because this will give us more opportunities to connect with potential customers.

We are expecting double-digit growth in Mexico in 2017. There are still many business opportunities in the country and by uniting Canada, Mexico and the US we will have a more diverse array of competences and skills. One of our goals has been to divide the country by regions depending on what products are made there, the type of technology used and how our portfolio can best target each region. With this information, we have created specific strategies to grow in the Bajio and the north of the country.

Q: What is the company’s inorganic growth strategy for Mexico and for your operations within the automotive sector?

A: Any potential alliances will depend on the available opportunities in each market but inorganic growth is a key element in our new strategy. We have participated in many mergers and acquisitions in the past and in July 2017, the company completed its latest acquisition in North America, buying Darex Packaging Technologies, which was originally owned by GCP Applied Technologies. We are constantly screening the market for further possibilities to generate value and Henkel is open to new opportunities.

Q: How is Henkel translating its sustainability goals to its automotive operations, both in its own manufacturing process and in its customers’ results?

A: Sustainability has been in the company’s DNA and that of its owners for over 140 years. We try to balance economic growth with social responsibility and development. One of the programs we have developed to this end is called ‘Sustainability Ambassadors,’ where we train our employees to understand the true meaning of sustainability and how Henkel’s products can support its customers’ environmental goals. To this day, we have trained over 25,000 ambassadors in 79 countries.

Within the automotive industry, our most direct participation in sustainable practices is by supporting  lightweight trends and by helping our customers optimize their resources. Carmakers and suppliers are constantly looking for technology that enables vehicles to be eco- friendly and to support stricter automotive regulations. A lighter car can have a lower impact on the environment, so we have developed adhesive technologies that can bond lighter components with the same effectiveness as alternative welding processes, as well as more efficient coatings for steel and other materials. An example is BONDERITE M-NT 1800, a coating process used as an efficient alternative to zinc phosphate in vehicle manufacturing. BONDERITE uses 20 percent less water than alternative technologies and the coating process requires 30 percent less energy due to its lower temperature. Using this technology can help companies reduce sludge generation by 90 percent.

Our varied portfolio grants us considerable advantages over our competitors in terms of sustainability. Henkel participates in every step of a car’s manufacturing process, from the pretreatment of steel coils to coatings and surface treatment of stamped parts, as well as bonding together the body structure and interior trim systems. At each step, our technologies help customers save weight in different components, leading to total savings of up to 30kg when the vehicle is finished.

Q: Considering that 62 percent of Henkel’s R&D expenditure is allocated to Adhesive Technologies, what innovations is the company planning to bring?

A: One of our most recent projects in terms of lightweight materials has been in collaboration with Clemson University in the US. Together, Henkel and the university are researching the effects of thermal expansion in different- material automotive structures. We are analyzing how steel- aluminum and steel-composite architectures behave and the best way to bond these materials without distortion.

In the past, assembling a body with pure welds was state-of-the-art in the automotive industry. Now, aluminum has become a key element in car manufacturing but its properties are different to steel. Aluminum expands more than steel when heat is applied, which means that trying to bond these materials through traditional welding techniques will lead to adhesive stress and potential component failure. Part of the goal for our project with Clemson University is to understand how to predict the stress in the component. Our findings will help us 199 develop proper adhesives with the correct elongation to compensate differences between the materials and will allow OEMs to design components with the right tolerances to avoid internal stress.

Q: How do Henkel’s solutions compare with other available alternatives in terms of cost-effectiveness?

A: Cost-effectiveness is based on innovation, value creation, risk evaluation and close cooperation with technology users. Companies are looking for better performance and high- quality solutions at lower costs and so far our investment in innovation has allowed us to maintain our leadership in the market. We need to identify technologies that will allow us to differentiate our company against our competitors. Although we develop technology ourselves based on what we know from our customers, we must also look beyond our borders and analyze what other players are doing. Startups often have disruptive technologies that prove to be just what the industry needs. We can support these innovations and grow together to support the automotive industry.