Summer 2010

Innovation in technology and materials (1)

Global trends are becoming increasingly important in defining nature and functionalities of materials. Developing new technologies and high-tech materials in emerging markets offers opportunities for cooperation with local textile companies.

TenCate develops and produces functional materials with distinctive characteristics and added value. These materials contribute in a positive way to progress, especially progress in social and environmental issues such as safety and protection, environmental benefits and savings in energy costs. TenCate draws on technological change and innovation for the development and production.

Technological innovation, cost management, product differentiation and end-user marketing – alongside internal factors – are the four cornerstones of the TenCate value chain model. These cornerstones are impacted by external factors such as emerging markets, differences in international product specifications and regulations, global trends and government stimulation measures. A good understanding of these developments and differences will have a large impact on the global business and will influence the global position in the value chain.

Roots
Technical textiles are still a relatively small part of global textiles production, which is still dominated by traditional textile products (mainly consumer textile products). TenCate also has its roots in traditional textiles, but approximately 25 years ago the company started to diversify internationally, outside its domestic region of the Netherlands. Since then the company has focused on its core technological competences and has gradually phased out production of its traditional consumer textiles. Currently TenCate is fully dedicated to technical textiles and high-tech materials.

The development of high added value functional textiles for demanding applications signalled the start of a successful transformation into a more technology-driven organization producing textile materials for selected end-markets. In general these are end-markets that demand specified materials, based on industrial, environmental and functional norms, legislation, etc.

Value chain management
The most crucial part of the TenCate strategy is the implementation of the value chain model. Textile companies in general are faced with complex and extended value chains and during the last 15 years TenCate has developed distinctive positions in these value chains. Also value chains increasingly tend to be international or even global. Raw material producers are often multinational companies that implement regional pricing in order to separate (geographically) or fragment markets.

Over time TenCate has acquired several companies as horizontal moves in several global value chains in order to create critical mass. More importantly, complementary technologies have been acquired in order to strengthen its technological capabilities. And recently new technologies have been added, such as digital inkjet technology. This technology is crucial for the development of digital finishing and nanoscale coating technologies.

The four cornerstones of the value chain model are also impacted by different geographical environments. There are international differences in, for example, product specifications and related technologies, market organizations, international cost structures, government relations, regulations and the like. A good understanding of these differences will have a large impact on the global business and will influence the global position in the value chain.

Global trends
TenCate focuses on global trends: safety and protection, as well as environment and durability. These global trends are becoming more and more important in defining the nature and functionalities of materials. An important development is the modernization of army equipment, aimed at creating more personal safety for soldiers under ever-increasing threat levels. In the normal work environment too, we notice stricter rules and regulations concerning personal safety. And the same applies to trends in durability and environment. Looking at composite materials, this is very important when it comes to creating light strong materials for aerospace (and ultimately all forms of transportation) in order to cut fuel costs.

The effects of natural disasters, such as floods, earthquakes and hurricanes, and the durable infrastructure investments create massive global potential for geotextiles and related products.

Emerging markets
Emerging markets especially will create a large growth potential for technical textiles − in the first place by adopting stricter regulations, mainly in connection with the above trends. Emerging markets will demand more high-end products. This is the reason behind the positive outlook for protective fabrics and geosynthetics in these regions. Another aspect is the search for technology. No longer do emerging markets serve only as low wage countries. They are developing their own domestic industrial and technological infrastructure. New technologies and high-tech materials will be produced domestically in the near future.

For established technical textile companies this creates an opportunity to cooperate with local textile companies. One of the main challenges is the protection of technological capabilities. In this respect TenCate defines the ‘fast push’ and the ‘slow pull’. The first means that established, matured technologies can be exported to emerging markets more quickly in order to create a market. The second means that, although there will be a technology pull from local emerging markets, exporting innovative technology too quickly could threaten the position in the global value chain and may commoditize a market too soon in the life cycle of a product/market/technology combination.  

Blue fabric (Tecawork Blue 65287)