Poised for growth

| May 1, 2017

H.B. Fuller invests in new products and facilities to help its tobacco customers succeed in an increasingly challenging environment.

By George Gay

Currently, there is much talk within and outside the tobacco industry circles about the so-called tobacco endgame, but such talk is far from the lips of Stuart Jenkinson, the business director for converting at H.B. Fuller. “We are still investing, and we shall continue to invest in this market to develop new products to support our customers,” he told me last month during a telephone interview that also included two of his colleagues. “Now, we know there are challenges in the market, but our commitment is to help our customers continually improve their manufacturing processes.”

Jenkinson made his comments during a conversation about a new adhesive that H.B. Fuller has developed. Ipacoll 2616, which is a water-based cigarette tipping adhesive designed for double roller application systems, was developed to deliver consistently and across a wide performance window ultraclean and secure bonding, along with production efficiencies.

Jenkinson and his team decided about a year and a half ago that this was a product they wanted to develop. “We do a lot of the work in our labs in Nienburg [Germany], where they have a specialist tipping rig, which is where we start the new product process,” he said. “And then we engage with the [original equipment manufacturers] and other machine manufacturers to make sure that the product works on their standard equipment and anything that could be new in the marketplace for this application. We then go to specific customers to ensure that it works before we do a full launch, as we will do now.”

What came out this process is a product that Andrzej Dabrowski, H.B. Fuller’s business manager for tobacco in Europe, the Middle East and Africa, described as providing high-performance bonding while running very cleanly on high-speed machines. It is a product that even inexperienced machine operators found easy to handle, he said, because it could be put on a machine and, with the settings having been made, left to operate efficiently at different machine speeds and with different papers.

For companies working in more than one location, it offers also the advantage that H.B Fuller is able to produce it with the same raw materials and to exactly the same formulation in many of its factories around the world. And its clean running is of an order that means that tobacco manufacturers can cut by a significant amount the time their machines are stopped for cleaning.

The clean-running issue was taken up, too, by Jude Liddle, marketing manager for the converting business. “Cutting the cleaning time is an example of how H.B Fuller is always looking to move its products on,” she said. “The company has other good tipping products, so it was about assessing their performance and understanding where that performance could be pushed. In addition, H.B Fuller listens to what its customers are looking for, and, in most markets, that is efficiency—making machines work harder for longer.”

New products and materials

So far this year, H.B. Fuller has announced the launch of two new tobacco industry adhesives, the other being a hot melt designed to work on all filter types, filter materials and filter machines, including filter combiners. HM 8229 E can be used with the full spectrum of filter types, including combined filters, high porous plugwraps, stiff/rigid plugwraps, recessed filters and capsule filters.

Dabrowski said that the new adhesive performed well on the thicker materials that are used on some of the new types of filters on the market and that are more difficult to bond than are thinner papers. It is a completely different hot melt from others that are available. It uses new raw materials that provide a very high hot tack, which means it is able to bond securely to difficult surfaces even if it has not cooled down fully.

This ability to work with difficult materials, he added, is important because, whereas in the past such special filters were manufactured by a limited number of companies producing a limited number of products, now the number of such filters is rising, and they are being produced by an increasing number of companies.

According to a press note issued in February, the new filter adhesive’s ability to penetrate deep into filter paper means that it provides a secure bond and ensures filter integrity throughout the production process and a cigarette’s life. And, the note said, because it can be used across the range of filter types and filter machines, it can help to simplify filter making operations by reducing production complexity, a point emphasized by Liddle. “What we looked at doing with the new hot melt was to widen the performance window,” she said. “So where a manufacturer might have had to use a couple of filter hot melts, he can now use just one. It’s a wider performance window that covers a lot more of the market needs in terms of filter types and paper types, so our customers can achieve complexity reduction in respect of the number of products they have to buy.”

Industry cigarette factory line

New facilities

As well as developing new products, H.B Fuller has been investing in new and expanded facilities. “I think the key recent investment for us as a global company is the factory that we built in Indonesia and that was opened in October,” said Jenkinson. “That factory will be supporting the tobacco market in the region where, obviously, Indonesia is a particularly interesting market in terms of volume.”

Jenkinson said that the new factory, which focused on the tobacco and hygiene businesses, was built on a greenfield site to very high standards. “It’s a question of transplanting best practice that we’ve learned over the years, and that is why the new factories we put in are always to the highest standards,” he said. “It doesn’t matter where they are geography-wise. We have our high standards, and we expect them to be translated around the world.”

H.B. Fuller said in a press note last year that the new manufacturing facility, built on 30,000 square meters of land in Surabaya, Indonesia, had strengthened the company’s presence in the Asia Pacific region, where it already had manufacturing facilities in China, Japan, Malaysia, the Philippines and Australia.

“This could not have come at a more opportune time, as a recent report indicated that significant growth in emerging markets is driving product development and expansion opportunities for consumer goods manufacturers in key countries, including Southeast Asia,” the press note said. “In fact, it is estimated that, by 2025, approximately 50 percent of global consumption will take place in emerging markets.”

It’s not surprising then that H.B. Fuller has also completed recently an expansion of its facilities in India, which Jenkinson described as comprising a regional center of excellence. The Indian manufacturing plant, which has a capacity of 24,000 tons per annum, was built in 2011 at Shirwal, about 65 km from Pune.

The expansion, which constitutes the first phase of a further $20 million investment in India and which officially opened in March, includes an expanded R&D center and new business office. This expansion, the company said, strengthens its commitment to customers in India and neighboring areas. Through the addition of its new business office in Pune, as well as its new state-of-the-art R&D center, spanning 5,000 square feet of the Shirwal manufacturing plant, the company is able to help its customers solve problems and create new solutions more rapidly than ever before.

“We are pleased to be expanding our footprint in India,” said H.B. Fuller’s president and CEO, Jim Owens. “We are optimistic about the new opportunities our new business office and R&D center will provide us—and our customers. By having a state-of-the-art facility and adhesive experts on the ground in India, we will help accelerate innovation in the region and help drive customer performance,” said Owens.

The new R&D center features dedicated areas for conducting experiments, running demonstrations and training customers on its hot melt, water-based, anaerobic and cyanoacrylate technologies. And its proximity to the production floor increases collaboration between the company’s R&D and operations teams. At the same time, the new business office houses 50 employees in customer support and administrative roles.

Jenkinson made the point that the increase in the facilities and the number of people working out of the Indian facility implied, in part, that H.B. Fuller saw the neighboring region as a hub for it to continue to grow. Indeed, also in March, the company announced the official opening of a new office in Dubai, United Arab Emirates, to support the company’s growing base of customers in the Middle East.

The new office in Dubai serves as the operational base for Harsh Gupta, regional general manager for India, the Middle East and Egypt, who is said to be setting up new teams to support customers in these regions and the company’s growth strategy. “H.B. Fuller is known for offering high-quality, high-performing products with exceptional technical support,” said Gupta. “The way we will create competitive advantage in the Middle East is by being more nimble and targeted than our other large competitors. Compared to some of our smaller competitors, we have global scope and strength to take new consumer product ideas and make a global impact.”

So, what’s next in the pipeline? Well, Dabrowski mentioned that H.B. Fuller was already planning its next investment and suggested that a new product was expected to be announced in about six months’ time.

 

 

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