Polyurethane (PU) is used throughout the vehicle. While its main application is in car seats, it is also used in bumpers, interior headliner ceiling section, car body, spoilers, in doors & windows, etc. Polyurethane helps in reducing weight of the vehicle (thus, increasing fuel economy), increasing comfort, insulation and sound absorption. As a leading supplier of polyurethanes, Dow manufactures key chemical components as well as fully-formulated polyurethane systems for foams, adhesives, sealants, elastomers and composites. Jon Penrice, Vice President Polyurethanes, Dow Chemical, leads the company's polyurethane businesses for Europe, Middle East, Africa and India. A frequent traveler to India, Penrice sees huge potential for PU business in the country with growing automotive sales giving a major boost. In this freewheeling interview with Rakesh Rao, Jon Penrice elaborates on usage of polyurethanes in automotives, emerging applications and business plans for India.
We are very optimistic about India’s automotive market. To address the requirements of this market, we are developing supply chain in India which is bigger as we now have a large asset in Sadara (Saudi Arabia) that can supply materials to India. Seeing at the growth potential of India,
we want to develop a robust supply chain and local innovation & manufacturing capabilities.
We want to make sure to offer solutions at local level by leveraging on our global strengthen, ie adapting global technologies for meeting requirements of the local market. There are also innovations that are exclusively for India. For example, we are working on technology that can use PU in bi-cycle tyres to improve shock absorption and durability.
Globally, PU market is about 5 million tonne, with automotive accounting for about 20 per cent. In India, on an average, seats account for 6 to 10 kg in a car (with 6-7 kg PU being consumed in seats per car). If you take into consideration other applications of PU in a vehicle, the consumption of PU per passenger vehicle (PV) in India could be approximately 10-12 kg. PU is also used in segments such as replacement, commercial vehicles, two-wheeler, etc. However, we believe market will not stay as it is today. We expect the market for PU to double in the next five years in India.
Though, we sell to tier 1 & 2 suppliers, we continuously engage with OEMs to understand their needs and market trends. Automotive industry is highly regulated. Parts that go into automotives need to meet all the technical specifications and hence it takes time to bring new innovations to market. However, once new products are approved and certified they stay for lifelong with that vehicle brand.
Automotive production lines are capital intensive and cannot afford to stop due to shortage of parts. Hence, ensuring unhindered supply of parts and materials is very important for OEMs to ensure efficiency and profitability. So while we focus on innovation, we are also making sure supply reliability for our products.
In medium term, lightweighting is a major trend where fuel efficiency is a driving factor. We help OEMs to reduce the weight of the vehicle by providing them with lightweight PU products. Companies are looking to replace metal with PU composites. Being at the forefront of this advanced technology, we are in position to make handsome gains as we see its usage in automotive industry to grow.
In the long term, we see huge opportunity in electric vehicles. EVs will redesign completely the way a car is built. It will be much more like mobile living space, ie a living room on the wheels. We are currently focusing on developing PU products to meet the electrification needs of auto makers. This again will give us a competitive-edge in India as electric vehicles gain traction in the country.
One of Dow’s seven 2025 Sustainability Goals is dedicated to advancing the Circular Economy by delivering solutions to close the resource loops in key markets. For example, we have developed a technology to convert end-of-life mattresses (which otherwise would have ended up in a landfill) to usable polyols. The polyols recycled through the process can be applied into a variety of polyurethane applications such as car seat, insulation panels, etc. We call this process as upcycling. Theoretically, we can recycle any product that has polyurethane in it. Though this technology is in a pilot stage in the Europe, it can very quickly come to India.
In future, vehicles will have to be designed by keeping in mind end-of-life application. This is not yet in the market. But we are developing technologies to meet long-term sustainability goals that can give us a leading edge in the market.
PU is already a material of choice in premium cars. While OEMs are looking at lightweighting, consumers are demanding better quality interiors even in entry-level cars. With soft touch dash-board gaining popularity, there is growing demand for polyurethane as PU gives tremendous operational capability. Thus, while the consumption of PU per car may more or less remain the same, the market is shifting towards high-quality, premium raw materials.
The real concern is high volatility in oil prices and currency. This distracts customers as it (volatility) sometimes tends to take focus away from innovation.
Trade conflict between the US and China (two of the world's largest economies) is increasing. Will this have an effect on global trade?