Leader of the pack: interior upholstery15 May 2016
The buoyant automotive leather sector is an exception to the overall industry as international premium brands post record monthly production results. And with car sales up across the board and expected to rise, especially those cars containing leather, demand in hides will invariably grow proportionately. Leather International asks Joachim Henkmann, director, global industry management, automotive leather, BASF, just what it is that makes automotive leather so appealing and where the most tangible developments are seen in the sector.
Leather International: What factors have enabled the leather automotive sector in particular to thrive and how has it been a source of opportunity for BASF?
Joachim Henkmann: The automotive industry is one of BASF’s key customer industries. Modern vehicles are already based on several chemical products and solutions.
For our leather chemicals business, the automotive industry offers many opportunities as most high-end vehicles, and a growing number of mainstream cars, are switching to leather for their interior upholstery. Leather is so much more durable than other materials. The feel and smell of quality leather cannot be duplicated. There’s no doubt that leather is a lot more alluring than textile. Car-makers are covering instrument panels, tops of doors and previously moulded parts with leather.
As the car interior evolves, what areas regarding the seats or instrument panels of doors, for example, are particularly interesting from a chemicals standpoint? What are the unique characteristics and demands for leather on different surfaces to ensure optimum performance?
The challenge for most OEMs is the ongoing need to differentiate in terms of innovation, design and appearance. Car interiors are all about comfort and safety – and, today, design and styling are also important. The beauty has to be there while fulfilling stringent regulatory requirements.
In this regard, we recently launched a new-generation topcoat system that achieves a 20% higher durability compared with the industry benchmark, and meets the most stringent requirements from OEMs in terms of volatile organic compounds (VOC) and consumer safety. Furthermore, we make it possible to achieve leather that is approximately 20% lighter than standard automotive leather but with a comparable tear strength. A light finish with soft Astacin PU binders and topcoats imparts an elegant, natural look with improved water vapour permeability while fulfilling automotive fastness requirements.
Transparency Market Research (TMR), a global market intelligence company, issued a recent report saying that the global leather chemicals market, with a valuation of $5.43 billion in 2013, will expand at a healthy 6.1% CAGR and reach $8.19 billion by 2020, and a big proportion of that growth is due to the automotive sector. Can you detail the investment and R&D culture at BASF when it comes to leather chemicals and what opportunities you’re seeing at the moment considering these projections?
We only disclose R&D investment on a corporate level and not for individual business units.
BASF’s research pipeline comprised approximately 3,000 projects in 2015. We increased our spending on research and development by €69 million to €1.953 billion (from €1.884 billion in 2014).
In the case of leather chemicals, BASF’s history with leather started in 1891 and the first leather laboratory was established in 1895 in Ludwigshafen, Germany. Since then, BASF has a tradition of innovations in the industry.
BASF launched DryFast, our newest beamhouse process, to the market in 2014, which combines the advantages of a range of products to create a solution that significantly reduces water, energy and process time for tanneries.
This was quickly followed in 2015 with a new generation of topcoat systems for automotive finishing that offers higher durability and meets the most stringent requirements from OEMs in terms of VOC and consumer safety. Another new introduction was the 3S (superior, secure, simple) surface coating system for corrected-grain leather, which sets a benchmark in fastness standards.
These present-day innovations are in keeping with our tradition of pioneering a number of ‘firsts’ in the leather industry, including the first synthetic tanning agent in 1912 and the first non-benzidine dye in 1972 – solutions that helped shape the course of development within the leather industry.
BASF also recently announced an investment of approximately €50 million in a new Innovation Campus in Navi Mumbai, India, which will be operational in 2017. The leather chemicals unit will have a development lab there. This new facility will enhance our ability to innovate in Asia, for Asia, and shows our commitment to the leather industry in India. The new lab in Mumbai strengthens our network of existing R&D leather centres in China, Germany and Spain, and creates new opportunities for building and expanding customer relationships.
What is the trend for clean chemicals and safer chemical substitutes that deliver the same, if not better, performance, and how is the automotive market responding to cleaner alternatives?
While leather itself is pretty much what it has been for millennia, the quality of car leather is steadily improving. Undoubtedly, in the future, there will be even more emphasis on environmental sustainability. Customers are becoming more environmentally aware, and we have a responsibility to ensure that the tanning process and the produced leather are as environmentally friendly as possible.
BASF has a strong commitment to ecology. Internally, we are constantly working on improving the eco-status of our products. Our product offering for automotive finishing products is completely NEP-free, which is in line with industry demand. In future, we will continue to work closely with customers to devise process solutions for meeting stringent requirements for the leather articles and the effluent norms. Our portfolio is completely REACH compliant and we practice several responsible care initiatives already.
Recently, we added a new technology to our business called ‘valure’ – a transfer coating technology that allows virtually unlimited design freedom in car interiors. The coating consists of water-based polyurethane dispersions that can be applied on to leather, textiles or plastics. The coating is microporous and offers enhanced breathability and comfort. valure offers the possibility of equipping seat covers or plastic components with leather structures, geometric designs or soft-touch effects.
Considering how quickly consumer tastes and trends change, and how sluggish companies can be to deliver, how can automotive chemical development keep pace with this new ‘at once’ culture?
Technology and competition will likely make for more leather options and advances. Many years ago, there were significantly lower requirements than today in terms of quality, comfort, sustainability and the number of individualisation options.
In the future, there’s likely to be more variety in colours and patterns. The next generation of cars will go further as to how they’re sewn, the patterns of quilting and layering.
Asia-Pacific is a dominant automotive region for leather chemicals in terms of volume, but what new markets are particularly exciting now?
The production of automotive leather is vastly different to the highly fragmented leather business with many tanneries, particularly in South Asia and China, producing mainly shoe upper or accessory leather. Automotive leather is a segment with a rather limited number of tanneries being able to fulfil the very high specifications and needs along the value chain, having globally operating tanneries with a centralised decision-making process.Overall, we see the distribution of global automotive leather production as very balanced and equal in share among the US, European and Asian continents. We believe that the largest finishing production today of automotive leather is in Mexico and the volumes might further increase thanks to the annual growth of light vehicle manufacturing in North America paired with an even higher increase in the use of genuine leather in the car interior.