Q&A

The over 150-year old Ax­alta Coat­ing Sys­tems, head­quar­tered in Philadel­phia, man­ages its busi­ness in 5 re­gions ser­vic­ing North Amer­ica, Latin Amer­ica (in­clud­ing Mex­ico), China, East and South Asia, and Europe, Mid­dle East and Africa. Its prod­ucts in­crease

Auto components India - - CONTENTS - ACI

Ax­alta ready to sup­port OEMs with ecofriendly coat­ings: Charles W. Shaver and Sober Sethi

Q: In com­mer­cial ve­hi­cles, we could see more colours. How do you see the trend and is there any seg­ment that is keen on new colour schemes?

Sethi:

It al­ways de­pends on what the cus­tomer wants. I can see a lot of younger gen­er­a­tions do­ing busi­ness and want their ve­hi­cles to be unique and at­trac­tive. Cor­po­rate iden­tity is be­com­ing a big­ger part and they want their vans and trucks to have dis­tinct iden­tity in the mar­ket which did not ex­ist in the past. Tata is com­ing with new colours like sunrise or­ange in CVs which we are sup­ply­ing to them. That is great for us to move to new colours which are bright, shiny and look bet­ter. There­fore, it is the right time for us to be in In­dia.

Shaver:

Glob­ally, the in­side and out­side of ve­hi­cles are be­com­ing a sort of com­mod­ity. The styling and colours give you the dif­fer­ence. The in­te­ri­ors of most of the ve­hi­cles look sim­i­lar and in In­dia most of the ve­hi­cles look sim­i­lar even out­side. But now, we are see­ing a lot of com­pa­nies work­ing on unique colours. It is an ideal time to be in In­dia. Con­sumers con­tinue to want to be de­lighted with new and fresh de­signs, colours and spe­cial ef­fects.

Q: As you said, colours play a vi­tal role in dif­fer­en­ti­at­ing prod­ucts es­pe­cially in the In­dian mar­ket. Apart from it, what else drives Ax­alta along­side In­dian cus­tomers and OEMs?

Sethi:

The first thing is pro­duc­tiv­ity. For ex­am­ple, we in­tro­duced to one of our cus­tomers di­rectto- metal prod­uct which avoids primer. It takes a process away and it is more com­pet­i­tive. You can make more in a short time so, pro­duc­tiv­ity is al­ways a cri­te­rion which drives all. And in some cases, if you look at the re­fin­ish, en­vi­ron­ment-friendly wa­ter bond tech­nol­ogy is widely used. Some of our OEMs are not us­ing it but some of their body shops wants to use our wa­ter bond paints. In a mass pro­duc­tion, it varies from pro­duc­tiv­ity, colour dif­fer­en­ti­a­tion, own­er­ship, and deal­er­ship. So it is about show­ing the sus­tain­abil­ity and it varies from busi­ness to busi­ness. We pro­vide a range of per­for­mance and trans­porta­tion coat­ings for man­u­fac­tur­ers of light and com­mer­cial ve­hi­cles, the re­fin­ish af­ter­mar­ket and for many in­dus­trial coat­ing sys­tem ap­pli­ca­tions.

Q: There is a trans­for­ma­tion from sol­vent-based to solid wa­ter­borne paints. How do you see the trend in the In­dian mar­ket as there are many value ad­di­tions in terms of higher pro­duc­tiv­ity?

Shaver:

It makes a lit­tle bit dif­fer­ence in what seg­ment you are in. As I said ear­lier, re­fin­ish body shops will see more wa­ter­borne paints but it will be slower in in­dus­trial area. The wa­ter­borne coat­ings are a source of less tox­ins go­ing into the en­vi­ron­ment. There are higher lev­els of tox­ins in the air long after the paint­ing is com­pleted when us­ing a sol­vent-based paint. Wa­ter­borne coat­ings are a non-flammable, non-toxic and non-haz­ardous way to paint your equip­ment. This is the per­fect op­tion when look­ing for a paint coat­ing that meets the clean air reg­u­la­tions fully. There should be push from the gov­ern­ment, like we see in China.

Q: Apart from Gov­ern­ment’s push, what kind of cost dif­fer­ence do sol­vent and wa­ter­borne paints have?

Shaver:

Wa­ter­borne paints will cost more. But you can use less

and its pro­duc­tiv­ity is more. For ex­am­ple, sol­vent-based paint takes 4 to 6 hours to spray whereas wa­ter­borne takes less than an hour. There­fore wa­ter­borne is 3 to 4 times more pro­duc­tive and higher vol­umes in less con­sump­tion time. At the same time switch­ing to wa­ter­borne in In­dia is a big deal as the en­tire set up for wa­ter­borne has to be changed which will cost around $30-40 mil­lion.

Q: Do OEMs take the lead in the wa­ter­borne busi­ness as its vol­ume is more and pro­duc­tiv­ity has to be in­creased from their side?

Shaver:

It is up to them. Some­times, they may not want to make a large cap­i­tal in­vest­ment or shut down their pro­duc­tion line for a while. So, if they open a new plant some­where as they look for a change over, we are ready to sup­port them, as our plant is ready now. The best thing is to have a di­a­logue with them as OEMs will be more com­fort­able as we are ready for that. Also, in In­dia, the de­ci­sion of the cus­tomer en­hances pro­duc­tiv­ity, cost etc. We cer­tainly sup­port en­vi­ron­ment­friendly coat­ings and we be­lieve that hav­ing many cus­tomers is the so­lu­tion.

Q: The au­to­mo­bile in­dus­try is in a tran­si­tion. Many com­pa­nies are work­ing on light-weight­ing, com­pos­ite ma­te­ri­als etc. As a paint man­u­fac­turer, how are you go­ing to work with the same paint but on dif­fer­ent ma­te­ri­als and how will you show your unique­ness?

Paint­ing on a light-weight

ma­te­rial is a big deal. There are dif­fer­ent ma­te­ri­als com­ing in and all the colours have to match all the ma­te­ri­als. There­fore, lightweight­ing will con­tinue to be a big deal and it gets more com­plex be­cause you have to get the strength, weight ra­tio and crash test. Due to dif­fer­ent ma­te­ri­als, we can­not nec­es­sar­ily use the same primer that we use on the car body. All of these tech­ni­cal is­sues will make it more com­plex. Cor­ro­sion re­sis­tance will need to be op­ti­mised and im­proved. So, for each one, the primer will be dif­fer­ent for the change of ma­te­rial. The use of dif­fer­ent primer and the same paint on the parts will pro­duce dif­fer­ent colours. All coat­ing lay­ers will have to be mod­i­fied for the dif­fer­ent use of ma­te­rial.

Q: How do you say that Ax­alta gives per­for­mance prod­ucts?

Shaver: We dif­fer­en­ti­ate our prod­ucts. The per­for­mance can be ei­ther in paints or in the ap­pli­ca­tion. So its process, prod­uct on tech­nol­ogy and that is the way we de­fine oth­ers. Cus­tomers can get dif­fer­ent colours or colour through our ex­cel­lent per­for­mance which shows we are bet­ter than our com­peti­tors. We de­velop, man­u­fac­ture and sell wide se­lec­tion per­for­mance and trans­porta­tion coat­ings. Many au­to­mo­tive and light truck orig­i­nal equip­ment man­u­fac­tur­ers (OEMs) rely on Ax­alta to de­liver per­for­mance and in­com­pa­ra­ble colour pal­ettes. From su­pe­rior cor­ro­sion pro­tec­tion of our elec­tro­coats to lush basecoat colours and top­coats, we cre­ate an at­trac­tive fin­ish that will tol­er­ate un­der the rough­est weather and road con­di­tions. Sin­gu­lar fo­cus on pro­vid­ing bril­liant coat­ings make us stand out from the crowd. We do not think about any­thing else ex­cept paint­ing.

Q: Ax­alta plays a vi­tal role in the In­dian au­to­mo­tive in­dus­try. How do you view the other in­dus­tries like aero­space, de­fence and the rail­ways in In­dia?

Sethi:

For the Rail­ways, we are sup­ply­ing a new primer for bo­gies made out of car­bon steel, sand blast­ing etc. I would say 30% of its car­riages to­day are us­ing stain­less steel. It will take some time but we are keen about it. In De­fence, we do get some or­ders and paint some weapons of par­tic­u­lar colour.

Shaver:

In the aero­space busi­ness, we do some com­po­nent paint­ings, which is not a dif­fer­ent seg­ment for us. We looked at do­ing an ac­qui­si­tion in aero­space to get big­ger and we were quite busy in our other busi­ness. We will de­velop a big­ger po­si­tion for us in the aero­space in­dus­try. Qual­ity al­ways re­mains in our aero part.

Q: What will be your fo­cus in the aero­space in­dus­try? Will you be bring­ing any par­tic­u­lar prod­uct for that in­dus­try?

Shaver:

We will con­tinue to fo­cus on parts like tails, ailerons and noses. The com­plete knowl­edge about the in­dus­try will be ac­quired be­fore that. So that, we will be able to stand pretty good. More­over, $50 mil­lion mar­ket is not a huge one for us. We have got big­ger things to do at first hand. But, we would like to work in aero­space.

Q: Have you adopted any best prac­tices in In­dia that you fol­low in some of your plants glob­ally?

Shaver:

The de­sign of the new Savli plant is based on our Jiad­ing plant in China which we built 3 years ago. It was highly au­to­mated, lean and we took that for In­dia. In In­dia, we will learn more about the cost than China and the US fa­cil­i­ties. And, we may im­ple­ment our prac­tices and learn­ings we get from this plant in other fa­cil­i­ties in fu­ture. I am sure the learn­ings will keep us bet­ter.

Q: In the next 5 years, among com­mer­cial ve­hi­cles, twowheel­ers and pas­sen­ger cars, in which will Ax­alta take a deeper route?

Sethi:

I would say, if you look at the size of the mar­ket, the num­bers will grow more in pas­sen­ger cars, then twowheel­ers and com­mer­cial ve­hi­cles. In the next 5 years, the mar­ket share in In­dia for all the 3 sec­tors will be around $500600 mil­lion out of which $300 mil­lion would be from pas­sen­ger cars, $150-180 would be two- wheel­ers and the re­main­ing would be from com­mer­cial ve­hi­cles. So, we will con­tinue work­ing on all the seg­ments and since we are ready with the new plant, we are ready to cater to all of them and the di­a­logues are also on. Now I will not be able to dis­close the cus­tomer names. In fact, the first batches from our new plant are ready for despatch to our two-wheeler and com­mer­cial ve­hi­cle cus­tomers.

Q: Are you work­ing with any new cus­tomers here in In­dia?

Sethi:

We are work­ing with new cus­tomers in In­dia but those are all at ini­tial stages. But we are work­ing with our ex­ist­ing cus­tomers like Ba­jaj Auto for their new projects. We are also work­ing with a ma­jor com­mer­cial ve­hi­cle man­u­fac­turer for their new LCV project.

Sober Sethi, Vice Pres­i­dent and Pres­i­dent, Emerg­ing Mar­kets and Charles Shaver, Chair­man and Chief Ex­ec­u­tive Of­fi­cer, Ax­alta.

Charles Shaver sign­ing the first can be­ing filled at the Savli plant

Shaver push­ing the but­ton on HMI to com­mence the pro­duc­tion

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