Ten Cate Finds Solace in Pirate-Proof Shelters, Lightweight BMWs
Koninklijke Ten Cate NV (KTC), maker of plastic composites used in Airbus A350 jets, is exploring ways to capture demand for automotive composites as carmakers including Bayerische Motoren Werke AG (BMW) seek lightweight parts.
The Dutch company is working on deepening ties with carmakers, and options include establishing a joint venture, Chief Executive Officer Loek de Vries said in an interview. Ten Cate could make a financial investment, he said, ahead of an official announcement that will be made in the “near future.”
The effort reflects the allure of the automotive industry that’s embracing composites as it moves toward electric cars that require lightweight chassis. That’s in contrast to governments that have scrimped on spending and delayed orders for composite-based armor used in tanks and soldier uniforms.
The company, which this year acquired thermoset composite maker Amber to bolster its automotive offering, has already built a number of composite partnerships with companies such as BASF SE. (BAS)
Ten Cate sales fell 1 percent in the third quarter, driven large by a slow down in government spending. As military demand for armor wanes with the withdrawal of forces from Iraq and Afghanistan, the Almelo, the Netherlands-based company has been looking to tap growth markets including supply of composites to the aerospace industry.
De Vries said he’s seen an upturn in enquiries from shipfitters looking to add Ten Cate’s armor plating to create safe rooms on vessels in case of pirate attacks. That’s on top of civil demand for bullet-proof vests spurred by miner riots in South Africa.
Pirate-proofing ships and the automotive industry will help lift profit next year, De Vries said. Ten Cate will also see delayed defense orders come through to help bolster earnings, he said.
Another growth area for the company is aerospace composites, particularly once the Airbus A350 that first flew in June enters higher production volumes, de Vries said. Japan and China also are showing interest, with a particular eye on uni-directional tape technology Ten Cate is still reluctant to share to protect its expertise.
China is also among the customers showing interest in composite ballistic armor for ships, particularly for coast guard vessels, De Vries said. U.S. restrictions have blocked such contracts.
Ten Cate is eyeing the 2022 World Cup to be held in Qatar as a sales prospect for its division making woven synthetic grass systems used in Dutch top soccer division in the Netherlands.
The World Cup prospects come after Ten Cate has shift its focus in the market to be not just a material supplier but sell directly to customers to better market its higher technology fibers that come with a price premium.
The grass sector, once earmarked as a potential disposal candidate, is now considered core with de Vries saying there’s no interest in selling the unit. “There is too much potential in there,” he said.
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