How Kraiburg TPE Is Successfully Navigating a Rocky Business Environment

If you think the US economy is on the skids, you ought to take a look at Europe. As Rogé Karma writes in The Atlantic, “Over the course of 2023, the European economy saw close to zero growth. The continent’s two largest national economies — Germany and the UK — may both be in recession. Flagship European companies such as Volkswagen, Nokia, and UBS have collectively announced tens of thousands of layoffs.” Although a slight uptick is predicted for 2024, that grim reality overshadowed many of the press conferences held by European companies during NPE2024 in Orlando, FL, last month. A bit of an outlier in that regard was Kraiburg TPE. The supplier of thermoplastic elastomer compounds (TPEs) didn’t deny it faced challenges — particularly as to how its customers plan to navigate this rocky business landscape — the company projected a sunnier outlook than many of its peers. I sat down with CEO Oliver Zintner and Director of Sales and Marketing, Americas, Alberto Oba at the company’s booth on the NPE show floor to learn more.

Conservative planning pays off.

“The overall economic situation in Europe is quite challenging at the moment, but since the middle of last year, I can say that Kraiburg TPE is doing quite well,” Zintner told me. Business isn’t booming, he added, “but we are more or less meeting our budgets. Thanks to some conservative planning, we are seeing a little growth — we are not sliding backward,” stressed Zintner, who succeeded Franz Hinterecker, a 23-year veteran of the company, as CEO in January 2022.

Related:Kraiburg Launches Portfolio of Sustainable TPE Materials

What does keep Zintner up at night, however, is wondering what the company’s primary customers — many of them in automotive — are going to do in the coming years. “How much automotive business will remain in Europe? What will be the strategy of our established customers? Will car manufacturers like BMW and Mercedes go more into premium and manufacture fewer units? That might be a good business decision for them, but it may mean less business for us. The uncertainty goes on,” said Zintner.

While that sorts itself out, Kraiburg isn’t about to tap the brakes on developing innovative products for automotive OEMs. Just before NPE, it introduced EPDM adhesion compounds for automotive sealing and exteriors applications.

Compounds in comprehensive trial tests since 2023.

The compounds deliver adhesion, durability, and processability, and have been specifically formulated with UV resistance for automotive exterior parts, such as glass run channels and molded corner joints and end caps. They were developed in close cooperation with one of the most important global Tier 1 suppliers of automotive sealing products and have been tested in comprehensive trials since 2023, Kraiburg said in the announcement.

TPE-EPDM hybrid technology features constant EPDM adhesion quality at 23°C and 90°C heat aging, with dry surface appearance, said Kraiburg TPE. Flow properties are optimized to provide a broad processing window and increased design flexibility in part and tool design while maintaining high performance standards. Additionally, the compounds offer weathering resistance, color stability, low surface friction behavior, and wear and tear resistance. 

Market opportunities for medical-grade TPEs.

Kraiburg TPE also serves the medical device industry, especially with its Thermolast range of medical-grade TPEs, and that market isn’t subject to the up and down cycles of automotive. In fact, it’s quite healthy at the moment and is receptive to Kraiburg TPE’s portfolio, according to Zintner.

“We see steady growth in terms of the overall market, and we also see opportunities for our products, which can replace PVC in some applications,” said Zintner. He readily acknowledges that PVC is a good material with a long history of safe and effective use in the medical arena. It’s the plasticizers that are added to PVC that have raised some health concerns — not the underlying material — but in the public mind the nuance is lost, and PVC has an ongoing PR problem. Nevertheless, “if less PVC is used, well, this opens the door for other materials such as ours,” said Zintner.

The medical-grade TPE currently is only produced at Kraiburg’s plant in Germany, but the company is seeing growing demand for its products in the United States, especially in the diagnostics, syringe, and catheter spaces. Any thought of bringing production over here, since you have a plant near Atlanta, in Buford, GA, I asked.

“We decided some years ago that we would maintain one dedicated line in Germany, because our biggest customers are in Europe,” said Oba. “It is purely a cost question because of the special manufacturing requirements for medical applications. If it makes sense at some point, we could certainly transfer production to Atlanta.”

Sustainability a core competency.

Sustainability was a key part of Kraiburg TPE’s messaging at NPE. The company recently introduced sustainability as one of its core competencies, which is opportune as the European Green Deal, which has been called the world’s most ambitious climate plan, places new burdens on businesses. Without whitewashing the difficult choices the Green Deal poses, Zintner does see a silver lining.

“No one can sensibly argue against the need to be more sustainable. The ideas, in principle, are correct, but it’s the way in Europe that they are put into legislation that is really challenging. There are many requirements that industry needs to fulfill,” noted Zintner. That said, it is only a matter of time until similar rules and regulations are put in place in the Americas, he added. (In some states, notably California, one could argue that time has already come.) When that does happen, companies such as Kraiburg will be ahead of the curve, according to Zintner.

He found validation simply by walking the show floor. “Every second or third booth I see at NPE, it seems, is about recycling in one way or another. I didn’t really expect that, and it tells me that a sustainability mindset is already well on its way in the United States,” said Zintner.