Q: First of all, can you tell us more about the company’s market development efforts and what are your strategic business development plans in Asia?
Sophia Liu: In the US market, Huntsman is the first company that has launched the application, research and development of polyurethane in the composite wood products.
Until today, the company still has the largest market share in the US and European markets. The company is a pioneer in the development of wood-based panel products using polyurethane binders, and has been widely recognised by customers for our technology, product development, service and overall supply chain.
Many of the wood-based panel companies in the Asia market are growing rapidly, and they are keen to develop greener and more environmentally friendly products, so we will make use of the advantages of our products in the European and US market and introduce them to the Asian market.
We introduced the concept of ‘formaldehyde-free’ to the industry. As the awareness of environmental protection and health continues to grow, panel and furniture manufacturers are very optimistic about the prospects of this market segment, and we need to provide more relevant products and services to meet the demands.
In Asia, our developmental strategy is divided into two areas. First, on the outside, we will continue to promote the ‘formaldehyde-free’ concept to consumers, as well as panels and furniture companies.
On the other hand, by advocating the application of polyurethane in wood-based panel and other related product knowledge through industry journals and media platforms, we will try to clear any misunderstandings that consumers may have on our products.
In addition, we will formulate a marketing strategy, including how to provide support for customers and the clients that match our product values. This will help us establish long-term strategic partnerships with furniture and panel manufacturers.
Inside, we will continue to push for technological and product development, as well as improve our technical competence to ensure that we are able to meet product development trends and provide new products for our customers in the future.
Based on the globalisation of technological platforms and business advantages, we will develop products that are suitable for the Asia Pacific markets because the Chinese and Asian markets are very different from the European and US market.
Q: Huntsman is committed to the development of advanced materials and high-performance composite materials. What are the features of the company’s products and what are the main applications?
David Wu: Huntsman’s competitive advantages are mainly reflected in the following areas: Firstly, the company has been developing wood-based panels for nearly 30 years. Our strong technical foundation enables us to provide a full range of products for our customers.
In the Asia Pacific region, by introducing advanced and mature technologies from Europe and US, we are able to meet the market demands quickly.
Secondly, we also have a complete technical service system that provides customers with comprehensive services from equipment, technology, staff training, safety to other areas.
Being a global enterprise, we have an excellent communication platform and mechanism where our colleagues from all around the world can work together and share customer, service and technical experience, so that we can learn from each other.
At the same time, the globalisation of the platform has allowed us to help our customers expand to the global markets rapidly.
Companies may initially face issues with occupational hazards when using polyurethane in wood-based panel production. We will provide customers with workplace safety training and conduct periodic inspection to ensure that operators can work in a safe environment.
Our products are widely used in a range of applications such as oriented-strand board (OSB), medium density fibreboard (MDF), particleboard, straw boards, plywood boards and finger-jointed panels.
These panels are used in the production of furniture, decorations, wooden houses, packaging and container flooring.
Q: How do you ensure that your products remained relevant after all these years?
David Wu: First of all, the company has adapted to the changes in the consumer market. In the past decade, the country’s standards for formaldehyde emission have been refined continuously. People are using healthier and greener materials to make products, so we will develop products that meet the requirements of the market.
Industry requirements will change as the market changes. We will innovate and improve our products based on the new challenges and demands for new technologies, products and services.
More importantly, we established a localised service system. There are many different kinds of products in China such as wood, bamboo and straw. Compared with other countries, straw is mainly used in China as it contains Chinese characteristics. Therefore, we have developed our technologies and products based on different materials and customer requirements.
Recently, due to recent concerns over air pollution, people are paying more attention to the air quality in homes. To cater to this, our polyurethane products can reduced volatile organic compound emission of vehicles effectively.
As a result, we were awarded the BMW Supplier Innovation Award for Sustainability. This is a good example of how we can innovate and meet the expectations of our customers to create a win-win situation.
Q: In your opinion, what are the differences, in terms of product characteristics, between the US and the Asia Pacific markets?
Sophia Liu: There is a big difference between the Asia Pacific region and the US market. In terms of the wood-based panels, OSB has the largest market share in the US with 40 percent market share, but in Asia, it only constitute one percent. In the US, OSB is mainly used in residential construction, but in China, buildings are usually built with reinforced concrete.
In the Chinese market, wood-based panels are mainly used to make furniture. Therefore, particleboard and MDF account for a larger market share and we have developed our products for the market accordingly.
In fact, the use of polyurethane in OSBs can produce excellent results. However, using polyurethane in particleboards and MDFs bring about different problems. Therefore, we have changed the process accordingly based on application and made some technical adjustments.
Now, our polyurethane adhesive can be used for the production of MDFs with special quality grade. It not only optimise material performance, enhance durability and dimensional stability, and prolong service life, but also realise the ‘formaldehyde-free’ concept and make the products more ‘green’.
In addition, the business landscape and market structure of the two regions are also different. There are more wood-based panel companies in China and they have developed rapidly, ensuring greater competition.
Now, we are at a stage of achieving growth through differentiation. We need to continue to develop new products to help our customers achieve differentiation and maintain their positions in the market.
The US market is mature and customers there tend to focus more on technology, safety and service coverage.
The consumption pattern is also different. While in the US, consumers are more particular about product quality, in China, people are more price sensitive.
Q: There is increase demand for energy-saving and high value-added products. How do you plan to meet these demands?
Sophia Liu: At the moment, we are focusing on the application of polyurethane adhesives in the wood-based panels. We will continue to promote the new adhesives to improve the performance of the material and production efficiency.
We have recently developed two groups of release agents for MDF production. The first group, which is applied internally on the fibres, is very convenient to use. The group that is applied externally is less expensive due to lower dosing rates, so it can help companies to save costs.
Besides these, we are also targeting the high-end segment and will introduce more products to the Asian market when the time is right.
Q: What are the challenges that you face and what are your plans for the future?
Sophia Liu: Many customers in the region remain price-oriented and this is the challenge we face.
With the development of customised furniture and growing awareness of environmental protection, consumers will be more inclined to choose safe and high-quality products that can eliminate hidden problems.
In terms of the global polyurethane market for wood-based panel manufacturing, the market share of the Asian market is far lower than that of the European market at less than one percent. However, the Chinese market is bigger than the US market, so the prospect for the material is very good in Asia.
We have great confidence in the Asian market. We will expand the second phase of our project featuring a MDI production capacity of 240,000 tonnes. Our goal is to increase the capacity and put it into operation by the end of 2017.
With that, we will be able to meet the demands of the Asian market, while offering more competitive products, greater supply and better product range and services. This will help us stand out amongst the competition and drive the industry towards healthier and greener products.