The company is particularly interested in the Balkans. ‘There are a lot of single-unit foam producers, and we have put in conversion units to see if it is possible to generate enough demand to support investing in a foaming plant in the region,’ Robb said.
He has faith that this approach could be fruitful. Since buying IMPE, there have been a lot of approaches from single-site foam producers who can’t offer the broad product range or the security of supply that Vita can, he said.
Vita’s product portfolio has changed over the years. When it was listed in the UK, the portfolio included tyre-fill products and thermoplastics. Now, it has a much tighter focus on flexible foam.
Robb is happy with the way that the business is segregated by markets. ‘Our business is completely split,’ he said. ‘We have seen how other companies are going down the technical route.’ However, this does not appeal to Vita Group.
The business is split into comfort foam, technical foam and flooring. ‘I initially set up three divisions… but we have put flooring into technical,’ he said ‘Flooring uses 30kT/year of our in-process trim, avoiding sending any to landfill. When I joined , I came into a federated structure with many decisions made at a local or company level. Now pricing, technology, innovation, investment marketing and benchmarking are done at divisional level.’
Vita has opened a number of innovation centres, and is putting the market at the centre of its technology development. ‘When I arrived, there were 180 top-priority development projects,’ he said. ‘We have prioritised, and now have 20 for each of the divisions. These are monitored at executive level, and before any new projects commence, they are reviewed by the commercial team and approved by the MD and chief technology officer.’
The sharper focus has led to the launch of the Vitarest Pillow and the Orbis foam made with recycled Renuva polyol. Both won awards at the recently held Interzum@Home event.
This greater focus on key projects helped Vita to see the potential in bio-polyols and CO2-derived polyols. ‘We are developing and designing products for the market,’ Robb said. ‘We have taken the decision that there will be a sustainable equivalent to each new product. It will do the same job, but not necessarily at the same price, and it gives people a choice.’
Choice and unique selling points are very important for bed-in-a-box companies, which Vita Group supplies as a white-label manufacturer. ‘We understand that there are companies that want something different,’ he said. ‘It may only be a small percentage of the finished product, but they can use this as a selling point. The younger generation wants to buy something with a bio solution. The problem is that bio-based raw materials are not the cheapest.’
This change in consumer preferences is, in part, why the company partnered with the Renuva programme fronted by Dow Polyurethanes. It was also to show that Vita Group is changing, and wants to be ahead of the wave.
‘I’m a real believer that you don’t wait for legislation before acting,’ he said. ‘If you find that an additive like TCPP [tris-(2-chloro-1-methylethyl) phosphate] is going to have a challenge in the next few years, then you should move quickly.’
The opportunity for change was brought home to Robb with a family purchase of some pillows and mattresses. He mentioned the distinctive odour of these products at work, and discovered the company had been researching alternative solutions for some time. They were able to launch a TCPP-free product in 2019.
‘This has been a big success for us in the UK, and it is now about 20% of our production,’ he said. ‘There is no legislation forcing us to do this, but we believe the US will move towards it, and there is a lot of interest in TCPP-free formulations from European companies which supply products into the US.’
The move away from TCPP and the focus on sustainably sourced raw materials has also led to more business enquiries. ‘We’re adding TCPP-free formulations at a number of our sites, and we’ve got to get ahead of this for the whole industry,’ he said.
But the rationalisation doesn’t stop there. Robb wants to reduce the number of additives used across the company, and simplify the number of brands of machinery used. ‘After benchmarking our plants, processes and equipment, we have decided to use two main companies to supply our foaming machines when they need replacing in the future,’ he said. Vita Group is also committing to just three conversion companies.
Invest or pay the price
Vita Group did not stand still during 2020, the first, hard year of the pandemic. Robb’s experience of the Sars and Mers epidemics in Asia showed him that companies who stopped investing in the face of these challenges were at a disadvantage to those that kept spending once the epidemics were overcome.
The company invested in new lines at Lichtenfels, Germany; Ludus, Romania; Metzeler in Memmingen, Germany; and ICOA in Crancey, France. ‘Our investors backed us to keep investing,’ he said. During 2020, the company increased its foam capacity in Brzeg Dolny, Poland; Ludus, Romania; and Alytus, Lithuania. It also invested in additional conversion capacity at Psary, Poland and Middleton, UK. Further additional conversion capacity is set to go on line in Romania and Hungary in 2021.
Robb also wants to drive the company up the added value chain. ‘We want to sell converted and assembled products,’ he said. ‘We can do everything for a customer or sell a block or sell cut pieces. Our focus is in supplying high quality foam products to the markets we serve. We will only be considering marketing our own brands where it makes sense for us to do this. Mostly, the real estate and marketing costs makes that unattractive.’
In common with the rest of the polyurethane converting sector, raw materials have been a challenge for Robb’s team recently. Vita Group claims to be the largest flexible foam maker in Europe by both the tonnage of foam produced and turnover, so it has been possible to get polyols and diisocyanates. ‘We are doing well at getting tonnages in, but we are paying for it, and we have been looking at alternatives including bio polyols,’ he said.
‘In 2020, many businesses were under strain because of the arrival of coronavirus. By Q2, our raw material suppliers found that demand from many customers, including the flexible PU foam manufacturers, had fallen significantly. Obviously, they had to respond to the sudden drop in orders to protect their equipment and plant. From my past roles, I fully understand that it is not a simple job just to switch a chemical process facility off and on without difficulties. Vita’s PU foam market demand bounced back very quickly because of increased expenditure in home improvements, which could not be completely fulfilled in the light of the lack of raw material availability.’
He believes that the biggest worry is that if prices stay high, people will seek alternatives. ‘I think that raw material producers should understand that and will do their best to get back on track as soon as possible,’ he said. ‘Vita has concentrated on our current customer base. Many of our customers in conversion do not have a warehouse; they need material delivered just in time.’
This year will be another difficult one for the flexible foam industry, Robb believes. He said that raw material prices will remain high; tonnage will be a better measure of companies’ performance.
‘Originally, we thought that supply would be back to normal by the end of the second quarter this year, now we hope it will be quarter three,’ he said. But the raw material suppliers are reliant on maintenance programmes going well. ‘Sadara has started again, China prices are seemingly coming down.’
Robb said that demand is currently high for flexible polyurethane foam, as the value chains that were emptied during 2020 start to refill. ‘The whole industry has experienced unprecedented demand levels since mid-2020,’ he said. ‘People wanted to spend money, they were furloughed [in the UK] and couldn’t go out. They were buying things like new sofas, mattresses, and carpets with underlay. It went crazy for a while.’