Cytec CEO Sees ‘Outlandish’ Growth in Carbon Fiber Auto Parts
Cytec Industries Inc. (CYT), the second- biggest producer of carbon-fiber composites for airplanes, said greenhouse-gas limits and rising fuel-efficiency standards will drive “outlandish” sales growth to automakers seeking lighter materials.
Sales to vehicle makers in 5 to 10 years may surpass aerospace, which currently accounts for 90 percent of advanced composite sales, Chief Executive Officer Shane Fleming said today in a telephone interview. Cytec, based in Woodland Park, New Jersey, gains “critical mass” in the auto market with its purchase of U.K. competitor Umeco Plc announced today, he said.
Carbon fiber, used in golf clubs and Boeing Co. (BA)’s 787 Dreamliner, will be used in more cars as producers such as Daimler AG (DAI) adopt lighter materials to meet European Union limits on carbon dioxide, Fleming said. Ford Motor Co. said today it is working with Dow Chemical Co. to develop carbon fiber parts that can boost energy efficiency.
“This is going to be a significant market,” Fleming said. “The percentage growth numbers look outlandish because you are starting off a small base.”
Cytec is buying Warwickshire, England-based Umeco for 550 pence ($8.78) per share, a 46 percent premium to Umeco’s closing price yesterday. The company also announced first-quarter earnings that exceeded analysts’ estimates.
Hexcel Corp. is the world’s biggest producer of carbon- fiber composites for aerospace, Fleming said.
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