It wants to turn the business into something less like a roller-coaster and more like a funicular railway, which ratchets its way upwards, delivering consistency, steady growth and good returns.
This business model is built around differentiated products, with barriers to entry and the chance to use global presence and scale.
This idea bought Huntsman and Demilec together.
'Spray foam has largely been a niche market and it is becoming a significant product in the insulation space,' said Dough Brady, vice president, product management and technology at Demilec.
'Huntsman bought Demilec partly to globalise the brand. There are no global spray foam brands at the moment. There is great synergy in combining Demilec's spray foam knowledge with Huntsman's local systems house network,' he said.
Cold regions: hot opportunities
Brady sees Europe as the biggest opportunity for Demilec. His company has a range of HFC-free formulations in the US and once they are CE-certified it will move into the region, he explained.
'Demilec was founded in Canada, many of our North American customers spray in cold-weather which makes Russia an excellent opportunity.'
The spray foam company will partner with Obninsk-based Huntsman NMG (HNMG), a systems house which Huntsman fully purchased in 2012.
'We have strong, robust foams for those applications, and Huntsman has the local production, sales and support.
'HNMG is really a systems house with its own in-house distribution network across Russia. This covers all the key industrial centres. We have the perfect opportunity to take the technology directly to the contractors,' Brady added.
Brady is not just interested in the colder parts of the world, he has global aspirations.
'We are also looking at the Middle-East and Asia Pacific,' he said.
'The Middle East has aa high adoption rate and Japan has made great strides in converting to HFO technology. We feel we can be successful in that market,' Brady said.
Keep it simple
This is because Demilec has already developed pre-blended HFO-blown foam formulations that can be used on conventional machinery. Existing formulations can often only be applied on three-stream machines.
'These are much more complicated,' explained Brady. He believes that this complexity is holding the market back.
The move to HFO blowing agents is 'a massive change for the spray foam industry. We are having to reformulate completely. The HFO blowing agent is not a drop-in replacement, it requires a total formulation change. Working with the molecules has been a significant challenge for the industry.'
He continued:'The HFO molecule breaks down after a few days in the atmosphere, a huge, huge environmental advantage versus the HCFC molecule.'
If materials are one variable in applying spray foam, then the machinery and the application are the other two. Material suppliers may have limited influence over the spray foam applicator, but they can suggest the machinery that they should use.
Huntsman has ties with spray foam machinery maker Graco in North America and would be happy to extend them.
Machinery is important
'Graco has an international presence and capability. We have started conversations with them in Europe, and we will explore conversations in Asia too. They have a very strong distribution network,' Brady said, adding, 'cooperation will help their business, as we bring more products and opportunities.'
Looking at Huntsman Huntsman's M&A activity over the past few years, one thing stands out: the fit between Demilec and the purchase of Texas-based Oixd in 2013. Oxid's business is based on speciality polyester polyols.
'Demilec has its own polyester and creates its own polyols for consumption. By having our own polyols, it has made it easier in with areas such as flammability,' said Brady. Like other companies, Demileic started to specify its own polols to help control product consistency.
'We started from a control perspective in terms of vertical integration. Our company has a strong sustainability theme, and the polyols deliver excellent renewable and recycling content. We have 19% recycled and 6% renewable content in our resins from our polyols. We've been with soy since our foundation. The renewables come from PET renewables and from soy oil,' he added.
'We're not a polyol company, so to be able to partner with Oxid, has been very helpful for us, we have started exchanging best practices and technology,' Brady said.