Recticel seeks partner for auto interiors business

By Liz White, UT staffBrussels-Belgian foam maker Recticel wants a partner for its automotive interiors activities. The firm announced 17 May that it will be approaching various potential investors in the coming months to take an interest in its Spray polyurethane business. The group has been active in car interior trim based on Spray PU-which it developed in-house-since 1994. Both the technology and the chemical formulae are now protected by various patents, Recticel commented, in its announcement. Recticel has had some difficulty with this business over the years: last year, delays in automotive interior trim contracts for various US car models in the second half adversely affected its full-year results, the group's 11 March results statement said. The group pointed out that it also faced consecutive raw materials price rises totalling €18 million ($23 million) in this half year.When it first developed the Spray technology, Recticel decided to get the complex technology into the market, not simply by selling or licensing the approach to car makers or interior trim producers, but by developing its own production network, which now consists of 11 plants (7 in Europe, 3 in the US and 1 in Japan). Further growth is possible through licensing agreements, Recticel said. Initially, the group produced only skins for dashboards, later it used the technique to make door panels, but today it has become "increasingly involved in the manufacture of complete components," Recticel pointed out. The group has invested heavily in these plants, and start-up is expensive. Its European interior trim operations plants are past this start-up phase and "have acceptable profitability," the group said previously. But, in the US, model launch delays last year slowed the profitability of this activity, Recticel added. Nevertheless, the new technology has been "a major breakthrough in the automotive industry and formed the basis for Recticel's rapid growth in the past ten years," the group stressed. It has become the benchmark technology for interiors, Recticel claims, and is in use by Mercedes, BMW, GM, Volkswagen and more. In 2004, Recticel's automotive business-which includes a major seating foam business-formed Euro400 million of Recticel's total turnover of Euro1276 million. The group did not break out the interior trim share of its automotive business. Recticel has had great plans for expansion of the PU Spray business, claiming its turnover in the technology would double from 2003 to 2006, and expects annual sales of the technology to reach Euro230 million in 2006. By late 2001, the company had received Spray contracts worth Euro1500 million for 2002 to 2004, for model lifetimes lasting up to 2010, Recticel said. Back in 2002, spray sales reached Euro124 million."