PROFILE OF THE ACTIVITIES

COMFORT

The Comfort division is first of all responsible for the production of flexible polyurethane foam, which is then processed and cut at a later stage. Comfort foam is mainly a bulk product that is cut in the various conversion units, into customized semi-finished products for the seating and mattress industry.

The foaming rooms produce uniform polyurethane long blocks, which are then cut into smaller, transportable short blocks or into foam sheets on a roll. The short blocks are then cut and processed at a later stage in the conversion units, or delivered directly to clients in the seating and mattress industry. The range on offer is extremely diverse. It comprises both classical flexible foam characteristics (such as Comfort Bultex®) as well as extremely specialised varieties such as: viscoelastic foam types (Sensus®) or foam for specific market segments, for example paramedic applications (Foam for Care®).

In addition to foam blocks, the Group is also active in the production of cold moulded foam. It is normal with large uniform production series that specific components for seating are moulded directly in moulds. The big advantage of this production technique is that the foam does not have to be cut afterwards. In Europe the demand for moulded foam is primarily important on the Scandinavian furniture markets.

TECHNICAL FOAMS

Unlike the Comfort division, the Technical Foam division specialises in the production and processing of very specific foam types that are mostly intended for smaller niche markets. Technical foam types are used in a wide range of applications, such as sponges, scouring pads, filters, paint rollers, seals, packaging, acoustic insulation, energy and vibration absorption, rechargeable batteries, extremely fire-retardant foam for high risk clothing, light-stable foam for clothing, outdoor applications (Dryfeel®), horticulture (Polygrow®), …

Technical foam types should always comply with high product requirements because these are more often intended for advanced technical applications. The technical product know-how is not the only important factor. In several cases the physical or chemical basic characteristics of the foam still have to be modified by having the foam treated (for example via reticulation, impregnation etc.). These follow-up treatments are necessary to bring the foam products perfectly in line with the needs of the final application.

COMPOSITE FOAMS

The Composite Foams division primarily processes foam trimming from the production to new products. Although great efforts were taken over the last few years to limit the quantity of inevitable offcuts as much as possible, Recticel is always looking for more new applications for these residues. The trim foams that remain after the processing are cut into smaller flakes to be compressed together into large blocks at a later stage using a binding agent. These blocks are then cut into roll-material or into specific components. Composite foams are used primarily in typical applications like: packaging materials, building acoustics, shoes, indoor and outdoor sport fields,... These products are sold under the brand names Recmat® (sound insulation under floor covering), Recfoam® (a sound absorbing material for floors and walls) or Re-bounce® (high-quality, tailor-made shock pads and underlays for sports products).

Recticel’s trim foams that aren’t processed in house are sold on the free market. The United States has a significant outlet market for polyurethane trim foam. This trim foam is processed further locally into carpet underlay.

STRATEGY AND PROSPECTS: SHAPING THE FUTURE

Strategy: Rationalization, modernization and growth via selective projects

The postulated strategic scenario for the Flexible Foams business line progresses along two basic principles. The first basic thought serves to smartly adjust the industrial footprint to the new market. Compensating rationalizations with well-considered investment initiatives in a coherent and consistent manner will be the goal. On the other hand, there are also several growth perspectives that are characterized by innovation projects (in the Agro-foam business line among others) and geographical expansion in new markets such as China (together with Bedding) and India.

Internal growth

Despite the rather mature character of the comfort foam market, the global European seating business line still continues to grow. In general, one could state that the consumer demand for comfort foam follows the evolution of the gross domestic product (GDP) very closely. Contrary to Western-European markets, which are more likely to stagnate, the future growth will take place mainly in Central and Eastern Europe. However, this does not mean that the production activities in Western Europe have no further future. The ever growing demand for mattresses with a polyurethane core offers enough attractive perspectives for the Western European comfort activities.

As a European market leader in this segment, Recticel must be able to realize an organic growth in the coming years, which will at the very least be in line with that of the market in general. To further improve the profitability, one would look primarily at the adjustment and optimization of the industrial production equipment in line with the market needs.

Innovation

The internal growth of the Flexible Foams business line is also driven by the successful initiatives in the area of product innovation as well as by market needs. In order to keep its European leader’s position, the Group regularly launches new or improved products, stimulated by the various research and development efforts. The Group was able to surprise the market over the last few years with innovative Foam for Care® quality products: paramedic foam for wheelchairs, orthopaedic supports, new revolutionary anti-decubitus mattresses and anti-bacterial foam manufactured from vegetal raw materials (Natural oil based polyol foams or NOP based foams), etc.

Offering innovative solutions is an even greater challenge within the Technical Foams business line. After all, this is primarily directed at products with a large(r) added value which are primarily intended for very specific niche markets. Here too Recticel was able in the past to develop important breakthroughs. Examples are: Bulfast® (the light stable foam intended for the clothing industry (bra-cups among other things)), EPDM-like foam qualities for replacement of components in EPDM for the automotive industry, foam types for polishing pads for polishing vehicle bodies (with production and repairs), Polygrow® (a high-quality foam type for use as substrate in horticulture) etc.

Geographical expansion

The Group also has a very extensive production network in Western and in Central and Eastern Europe.

The activities in Central and Eastern Europe, taking place via the joint venture Eurofoam, have grown significantly since the beginning of the 90s. Despite the current economic crisis, Central and Eastern Europe will remain important for the years to come. It is expected that the annual use of polyurethane will continue to grow gradually for the local market. At present the local use is still well below the Western European average.

Recticel feels that its current position in the various countries is sufficient to successfully develop its strategy. In the future, the Group will however implement several cautious territorial expansions to Turkey and the BRIC countries.