Lehigh makes progress in quest for marketplace acceptance

ERJ staff report (TB)

By Edward Noga, Crain News Service

AKRON-“Show me.” That pretty well sums up the response of the clients, and potential customers, of Lehigh Technologies Inc.'s efforts to convince them to use its micronised rubber powder.

Tyre manufacturers, industrial rubber goods makers and others want proof the recycled material lives up to its billing as a sustainable, economically viable product.

And guess what: That's what Lehigh wants to do, too-prove the product and itself, according to Alan Barton, CEO of the Tucker, Ga.-based company.

“We're still in the 'pushing up the hill' phase,” said Mr. Barton, who joined the company in December 2008 after about 25 years at Rohm and Haas Inc.

Lehigh is advancing steadily, he said, in convincing manufacturers of the efficacy of using the recycled material.

“We're aiming for profitability by the end of next year. This will be our third year of 40-percent-plus sales growth. We're making real progress,” he said.

Progress to date can be measured by the number of customers that have adopted the six-year-old company's material. Lehigh has focused on the tyre sector, and Mr. Barton said five of the world's 10 largest tyre makers now are using the rubber powder. “We've got out of the top 10 probably another three that have actual development programs going, and two are just starting initial contact.”

Remaining patient

It's a slow process, he admits. It takes time for customers to become comfortable with the product, to accept it as a standard raw material, used like anything else put into a compound, he said.

“When customers believe in it, know it works, then you've crossed over the hump and it (sells) itself,” Mr. Barton said.

Lehigh has done-and continues to do-much to get to that point. It has created sufficient production capacity, is taking several routes on formulation improvement and is touting its successes.

Mr. Barton said taking a potential customer to the firm's plant, just outside Atlanta, “removes any concern the big guys have that if they adopt this product, there is enough supply.”

The structure looks like a typical chemical facility, he said, and has 140 million pounds of annual capacity.

“It's one of our biggest selling points, to show them our plant. It's got all the whiz-bang electronics, and data capture screens showing different parts of the process. We monitor a couple hundred parameters a second.”

From there the client goes to the firm's Applications & Development Center.

The 10,000-sq.-ft. building, adjacent to Lehigh's plant, looks like the rubber manufacturers' own labs, and includes all the equipment used for rubber compounding, moulding and testing. The center also has similar equipment for plastics and coatings, two other sectors Lehigh is targeting.

“For a little company, this is incredible,” he said, and the two operations show why Lehigh should be taken seriously.

The supplier also lets tyre manufacturers know what it's up to as far as improving its product. Besides working directly with those customers, Mr. Barton said, Lehigh is collaborating with other suppliers to make improvements in compound formulations. Additionally, the firm works with “little inventors out there who think they have discovered something.”

Mr. Barton said Lehigh hasn't taken these developments to their customers yet. “But we talk about it: 'Here's what we're working on.' “

Key achievements

Lehigh also is making a point of talking about its achievements so far.

In June, the company publicised that its PolyDyne micronised rubber powder now has been used in 100 million tyres. The firm launched a “Road to One Billion” campaign-to hit 1 billion tyres that use the material.

The company is out to show its green credentials with that effort, because that rubber powder is derived from scrap tyres, which keeps used tyres out of landfills and replaces non-renewable materials. The firm also has made note of receiving a National Science Founding research grant, and being a recipient of the World Economic Forum's 2010 Technology Pioneer Award for visionary leadership and transformational technology.

Mr. Barton, as well as other members of the firm's staff of 75, participates in various technical and scientific conferences. All of this helps validate the company's product and progress, he said.

Management changes

A significant change in Lehigh began just before Mr. Barton's ascent to CEO.

The firm's original leadership included Anthony Cialone, co-developer of the process and equipment Lehigh uses, who served as CEO; and Dennis J. Gormley, retired chairman, president and CEO of Federal-Mogul Corp. They left in early 2008 when another round of investors came in-Kleiner Perkins Caufield & Byers, Index Ventures and NGP Energy Technology Partners-followed by Mr. Barton's hiring.

“We petty much changed all the management team,” Mr. Barton said, and the firm now looks like a specialty chemical supplier. For example, among those managers are Kedar Muthy, vice president and general manager of Lehigh's tyre and industrial rubber business, who spent years at Cabot Corp., as well as GPX International Tire; and David O'Brien, major account manager for the tyre and industrial rubber sector, who worked for C.P. Hall, Rhein Chemie and Excel Polymers, and is a former ACS Rubber Division chairman. Expanding reach

Mr. Barton himself is a specialty chemicals man, working in research and development, then management in the US and Europe. He also led Rohm and Haas' sustainable development efforts. “I've spent a career introducing new stuff,” he said.

So far, the firm's primary focus has been on tyre companies, but its plans go far beyond that sector.

Lehigh has several industrial rubber product customers, providing rubber powder used in conveyor belting, flooring, gaskets and seals. Sparked by customer demand, it has added nitrile, butyl and natural rubber powders, and “EPDM is on our list,” he said.

The company's cryogenic process produces powder from ¼-inch scrap tyre chips, and it also provides closed loop process so customers can reuse their own materials.

The company also is making headway in plastics, and construction and coatings have big potential, Mr. Barton said, with roofing materials, flooring, paints and waterproofing. Besides PolyDyne, the firm produces MicroDyne, ultra-fine powders targeted for the coatings, plastics and paint markets.

The last big market on the target list is for use in asphalt for roadways, he said.

Someday, Mr. Barton said, Lehigh will go public or be sold so its investors get a return.

“At the right time, we'll be looking at which of those makes the most sense,” he said. “I could easily see us as being part of a big supplier to the rubber industry. If we could prove we are a standard formulating ingredient, why wouldn't they want part of that action?”

That's down the road, though. The firm now is in its building mode.

“Our mission is to prove that this is a sustainable, growing, valuable business to the world. That doing the right thing environmentally and the right thing economically is a winning proposition,” he said.

“Credibility is everything.”

This report appeared in Rubber & Plastics News, an Akron-based sister publication of European Rubber Journal

From Tire Business via Rubber & Plastics News (A Crain publication)