--An Interview with Hermann Althoff, Senior Vice President of BASF’s Engineering Plastics unit in Asia Pacific

Gasgoo.com: First of all, would you please give a brief on the application and prospect of engineering plastics in the automotive industry?

Hermann Althoff: At present, engineering plastics used in the automotive sector is mostly polyamide (PA). According to external reports, the average usage of engineering plastics per car is less than 5 kg currently in China. Yet in Germany, the figure is 25 kg, five times of that in China. One of the reasons why we are so optimistic about the Chinese market is the huge growth potential of PA and PBT application in the automotive sector.

As China’s auto production is assumed to remain the current level, a very big market is appreciable if usage of engineering plastics per car is increased from the current basis. With an optimistic expectation of the engineering plastics market in China, we have been expanding our facility in Pudong, Shanghai. Built in 2007, the plant was of a scale regarded world-class at that time. Inspired by the future potential of polyamide and PBT engineering plastics in the Chinese market, we will more than double the compounding capacity of engineering plastics by an additional 65,000 metric tons per year. We hope to be able to better cater to the demand for engineering plastics by automotive, electronic and electrical sectors in China with our capacity expansion.

Gasgoo.com: BASF predicted that the global plastics market would see an average growth of 5 percent as of 2015. In Western Europe, the proportion of plastics used in cars has grown from 6 percent in 1970 to 15 percent up to now. Some organizations predict that the proportion would rise to 25 percent or more by 2020. What’s the reason behind the trend of substituting plastics for steel in auto parts?

Hermann Althoff: There are some reasons for the trend of plastics as a substitute for metals. The first one is lower costs of using plastics. I am not suggesting that plastics are cheaper than metals; what makes the difference is the flexibility and freedom of design enabled by plastics. Made through injection molding process, engineering plastics allow for high-complexity designs, while metals could be never up to that. For a very complex design, 15-20 different parts need to be welded to shape it in the case of a metal; yet engineering plastics can succeed with the design easily through lower-cost injection molding process.

Besides, functional integration, better convenience and lightweight are also the reasons.

Gasgoo.com: As you just mentioned, the usage of engineering plastics per car in China is one-fifth of that in Germany. Yet actually, usage of high-grade engineering plastics is even lower. What factors do you think restrict development of high-grade engineering plastics in China?

Hermann Althoff: I think development of high-grade engineering plastics in China is hindered by several factors. Firstly, metalworking is a relatively mature and widely known process. Yet utilization of engineering plastics needs different equipment and demanding know-how. Secondly, production of engineering plastics is characterized by high capital costs and relatively low subsequent marginal costs. Thus a large initial investment is needed for molds equipped for production line, arrangement of production lines, to mention just a few. Currently, development of high-grade engineering plastics in China is restricted not because of China’s inadequate overall production capacity, but for the reason that the abundant but dispersed OEMs and multifarious car models are not equal to economy of scale required by production of engineering plastics. However, I believe this will change in future. The proportion of usage of engineering plastics would rise steadily over a relatively longer period.

Gasgoo.com: Where are engineering plastics applied in automobiles?

Hermann Althoff: Actually, in addition to battery and battery case, engineering plastics, especially PA, have been used for seat structure. Seats made of PA with foams and polyurethane have come into being. Next we are to substitute engineering plastics for the steelwork, with products available so far. Besides, engineering plastic oil pans as a replacement for metal ones are just in sight. Also, front overhangs structured with PA-metal mixed materials are believed near at hand. Another application is the gearbox shell.

Gasgoo.com: At BASF, how long is the time-to-market of engineering plastics intended for automobiles? What’s the biggest R&D challenge?

Hermann Althoff: R&D deals with both products and applications. Application development touches upon final applications such as automobiles, electronic components and parts. Generally speaking, time-to-market of electronic products is 6-18 months, and that of automotive category is much longer, 2-8 years possibly. In general, in western countries, one generation of car models usually stays on markets for no more than 7 years. Namely, accessories and spare parts developed for this generation of models are sellable for up to 7 years. This cycle may be shorter in China. As I see it, a car itself is nothing more than a complex system, with little difficulty found in our development. Then product development, which refers to development of raw materials such as engineering plastics like PA, is conducted at our laboratory. As a matter of fact, constant product development and improvement is part of our routine,. As far as product development is concerned, we largely echo with our customers. For instance, our current focus on batteries is driven by customers’ requirements.

Gasgoo.com: Would you please say something about the BASF Engineering Technology R&D Center in Shanghai, as well as your local R&D team?

Hermann Althoff: Our technical center for engineering plastics is located in Jinqiao, Pudong, offering services from engineering plastics-related design to component testing. The other unique feature is our competence for the highly sophisticated computer aided engineering (CAE) featuring computer modeling and simulation. Before availability of the prototype, computer modeling can be used to simulate future utilization of the part as well as its performance. In this case, we could further shorten the cycle of product development, thereby reducing costs.

At present, except for two Korean engineers, all staff at the center are Chinese people. We conduct local trainings and also send local engineers to centers of excellence in other countries for training, including our facilities in Korea, Japan and Germany.

Gasgoo.com: Thank you for the interview.

Note: BASF will more than double the compounding capacity of engineering plastics by an additional 65,000 metric tons per year at its Pudong site. Phase one of the expansion is expected to be completed by 2013, the second phase by 2015. At present the company operates an engineering plastics compounding plant with a capacity of 45,000 tons per year at the site.

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