Imagine a single product that could help power clean-energy buses in China, desalinate water in Saudi Arabia, produce ample fuel for transportation, and improve the accuracy of medical equipment in the U.S. Polymer electrolyte membranes, or PEMs, are just that product. Despite appearing no different from a clear piece of cellophane, PEMs can conduct protons, giving them global impact in areas as diverse as fuel-cell technology, hydrogen production, water purification, and chlorine manufacturing—all because PEMs have the seemingly simple ability to conduct protons.
“Jack-of-all-trades” products like PEMs certainly have the advantage of several use cases and markets. But how do chemical companies fully exploit the potential of such a versatile product? What are the best ways for chemical companies to take a single product and put it to work for a variety of applications, including ones yet to be developed?
Breaking into local markets
Because demand in these continents is greatest, North America and Europe have traditionally served as centers of the chemical industry. But these centers must also meet the needs of the Asia-Pacific region, which has experienced rapid economic growth in recent years. China and India, meanwhile, have become new chemical-production players, creating competition for the Western chemical industry.
To keep up with these new markets, global chemical companies can start by diagnosing consumer needs. “Opportunities in Chemical Distribution,” a Boston Consulting Group report, states that chemical producers and distributors can start by examining existing customer segmentation and then validating this information by researching applications and purchase patterns across the regions. Mapping unmet customer demands and development opportunities is also a critical step. From there, chemical producers can work backward through available technologies to find innovative solutions.
But price often becomes a major stumbling block. “Consumers in the U.S. have the resources to use highly innovative products, often irrespective of cost,” says Gerard Tellis, director of the Center for Global Innovation at the University of Southern California Marshall School of Business. But, he adds, lack of money and resources can be a big hurdle in other places.
Partnerships are another approach to entering new regional markets. Global chemical companies could consider joint ventures with new players based in these countries.
Finding new applications
After diagnosing customer needs and forming partnerships, chemical companies can find opportunity by adapting materials or chemicals for different applications. “A key part of market development is what I call application development,” says Michael D. Brown, founder of management consulting firm StrategyMark, which focuses on specialty chemicals. “In companies with best practices, the application development team—grouped separately from sales—drives the technical aspects of materials.”
Read more on how The Chemours Company adapts global products to meet local needs at: chemours.com/global-products
Take, for instance, plastics. On occasion, the construction industry replaces metallic materials with plastics, such as fiber-reinforced plastics, to make objects lighter, more cost-efficient, and corrosion-proof. How does a company determine which parts can be replaced with plastic when moving into a new, local industry?
In an application development team, engineers and designers partner with clients to answer this question. With plastics, “Fifty percent of the time you’re able to use off-the-shelf products and go from one application to the next,” Brown says.
For the other 50 percent, “You might have to tweak the formulation of the plastic a bit,” Brown notes. “Your application development team will figure out the changes that need to be made and collaborate with the research chemists to determine which parts of the formulation need to be tweaked.”
Government regulations can lend a hand there. Take plasticizers, mixed in to create soft and pliable plastics. Di(2-ethylhexyl) phthalate (DEHP) became a controversial plasticizer after researchers showed it may affect human reproduction and development. For over a decade now, DEHP has been banned from children’s products in the U.S. and Europe. In 2015, the European Union effectively banned DEHP in all uses, except in some medical device parts. In China, though, the government still allows use of DEHP. (Diisononyl phthalate and other plasticizers have taken the place of DEHP in Europe and the U.S.)
Fiber-reinforced plastics, which have fibers of glass, carbon, or a polymer similar to nylon mixed in with a polymer, can take the place of metals in several applications. Because the alignment of the fibers can be tailored to suit the specific needs of strength and durability, fiber-reinforced plastics are used in construction as well as in aerospace, automotive, and marine industries.
UltraRope is an example of how plastics could take the place of steel components in construction. This carbon-fiber-reinforced plastic, from Finnish company Kone, could replace steel cables in elevators in certain markets. Since steel elevator cables lack strength in lengths beyond 500 meters, UltraRope could be used in buildings that require up to 1,000 meters of elevator rise. And, because the carbon-fiber-reinforced plastic is capable of tolerating more friction than steel, the elevators require less energy to operate—an important consideration in local markets where energy conservation is critical.
The Versatility of PEMs
When it comes to changing single products to fit the needs of different regions, PEMs fit the bill. “Probably the biggest application today is for the chlor-alkali process, which involves taking seawater and converting it into chlorine gas and sodium hydroxide,” says Louis Madsen, an associate professor of chemistry at Virginia Tech. Chlorine gas and sodium hydroxide offer a host of downstream applications, such as in cleaning products, paper, textiles, and water treatment.
Medical equipment, meanwhile, leverages a different capability: The membranes efficiently absorb water vapor, so tubing made from PEMs can more accurately measure carbon dioxide in hospitals. “During surgery, you want to look at a patient’s respiratory carbon dioxide,” explains Purnendu Dasgupta, a professor of chemistry at the University of Texas, Arlington. “Using the method of infrared absorption, water vapor will cause a problem. But if you put it through a PEM tube, it completely removes the water.”
A growing application of PEMs is as a membrane in hydrogen fuel cells, which produce clean energy from hydrogen. While not yet an established market, the use of PEMs in fuel cells has steadily become more viable, particularly for Japan and China. The fuel-cell company Ballard Power Systems, for instance, recently supplied its product to China for low-polluting buses. Japan, meanwhile, is the world leader in fuel-cell technology, with 400 fuel-cell vehicles on the road today; the country hopes to have 800,000 fuel-cell vehicles by 2030.
In desalination, an electric potential drives salt through a PEM, separating it from water. Drier places like Australia and the Middle East have already embraced water desalination, and advancing the technology with PEMs could provide such regions with more than enough fresh water. Companies that sell PEMs could target these regions as well as those that aim to build desalination plants.
There is another, still unproven, use of PEMs that involves both seawater and hydrogen. Researchers in Norway are exploring the use of the country’s ample and underused offshore wind reserves to produce hydrogen using seawater electrolysis, instead of through fossil-fuel processes, as is common today (Int. J. Energy Environ. Eng. 2014, DOI: 10.1007/s40095-014-0104-6).
PRECIPITATING THE CONVERSATION
Chemours operates across a wide range of markets, from developed to emerging. Like any business, we want to give our customers what they want. But that poses a special challenge because their needs vary so widely by region. Companies have wrestled with this issue since the start of globalization, but as markets grow in sophistication, so does the level of intimate, granular understanding of markets needed to combine global efficiencies with local relevance.
At our core, we are a maker of building blocks that are fundamentally the same the world over (unlike the products they make possible). Our close ties to local customers enable us to help assemble these building blocks into products designed to fit their needs.
Ti-Pure™ titanium dioxide is a great example. It’s one of our key global product lines, sold everywhere from Myanmar to Canada. And if you wonder just how much something like this could vary from market to market, the answer is a lot.
Ti-Pure™ is commonly used in architectural coatings such as paint. When we work with customers in North America, we’re serving a region with many wood-frame homes. Other regions build with cinder block, concrete, or some other substrate. Climate conditions too may vary. Together, these factors guide how we supply our local partners.
In Mexico, for instance, our longtime partnership with a leading paint producer, combined with our understanding of the value chain, led us to spot an opportunity: Professional painters there needed a product that would cover with fewer coats. Our solution: Ti-Pure™ One Coat.
We could learn about individual local markets from research, but multinational companies that develop their own on-site relationships will always know their customers better. That’s what we do. Chemours makes seamless global-to-local transitions because we have feet on the ground in these markets. We know what people value and how local economies tick. We tailor our global scale to local needs, customizing our products and supplying markets with the exact chemical products they require.
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GLOBAL PRODUCTS TO MEET LOCAL NEEDS AT:
Solving global problems
For global chemical companies, managing the needs of different countries—and the diverse industries in each—can be challenging: It can be tough achieving the right balance between customizing approaches and creating scalability. Plus, rapidly growing markets, like those in China and Brazil, host a larger share of smaller companies, along with more and more homegrown chemical producers.
But global chemical companies can break into these new markets, often with a single existing product. PEMs are already used worldwide for chlor-alkali processing. The future holds even more promise, with PEM fuel-cell applications helping combat air pollution in China, PEM desalination bringing fresh water to arid countries, or PEM electrolysis creating hydrogen for transportation fuel.
By finding new markets to expand their reach, the future is clear for global chemical companies. The scientific solutions that these companies offer have the power to impact the growth of different industries, be they in China, Saudi Arabia, or the U.S.
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