JEC COMPOSITES MAGAZINE - Issue #101 - November/December 2015 - 5

D. S. : As we just discussed, the

composites industry in Germany
has many medium-sized firms -
the famous German Mittelstand
- that can claim world leadership
in many different subsectors.
But even the most technically
adept and commercially sound
company can struggle to maintain its position. Composites,
and advanced manufacturing
and materials, is an area that is
ripe for consolidation. Tier 1
manufacturers seek closer and
stronger ties with their supply
chain. They also look for worldwide production to match their
own multinational operations.
So, no matter how superior the
local supplier may be, they are at
risk of losing out to similar firms
that can offer truly international
coverage. Germany has the largest concentration of OEM plants
in Europe, for example, but more
and more are now divisions of
multinationals rather than being
German firms. Our work is not
simply discovering and assessing companies as acquisition
targets for major corporates:
we also work for the companies
themselves, researching and
developing strategies for their
continued growth. These strategies can incorporate creating a
mergers and acquisitions policy
for them, finding and building
strong collaboration and joint
venture partners, and gaining
investment to fund these plans.

JCM: What particular challenges
are there for new players seeking
to enter the composites market?
How is the value chain evolving?

D. S. : New entrants have to

swiftly seek to establish credibility and trust, but those with
existing supply chain connections can build on existing
relationships much more easily.
This strategy complements the

Future markets: Construction, including oil and gas, is potentially the biggest
market in the world for composites, but it's not ready right now.
(Image: istock.com/FauxCaster.)

Tier 1 move to supply chain
consolidation. Innovation is
also a constant challenge. A
new entrant may well be able to
evidence innovation in parallel
sectors, but they soon have to
demonstrate new materials,
methods and technologies to
maintain any position. Innovation also extends to the development of low-cost materials.
Higher performance attracts the
attention of the design engineering department, but low-cost
alternatives interest procurement. A market entry strategy
must demonstrate customer
value - keen pricing, reduced
energy costs, consistent product
performance, more rapid
production and less wastage are
essential attributes.
JCM: Analysts are predicting
strong growth in the carbon fibre
composite sector. How does FMG
see this demand developing?

D. S. : Low-cost carbon fibre is
a must-have for the automotive
industry particularly. Driven by
regulations and competition,
automotive is increasingly open
to innovative new materials,
especially carbon fibre. Niches
alone create massive demand:
just 1% of carbon fibre by mass
built into an executive car adds
$3 billion to the carbon fibre

market. Adding 1 kg of carbon
fibre to a mass-market car
doubles that. Construction, including oil and gas, is potentially
the biggest market in the world
for composites, larger than
aerospace or automotive, but it's
not ready right now. Designing
in new materials requires education: that's expensive and takes
time. Carbon fibre suppliers
developing market positions
within construction can expect
exceptional growth.
JCM: How do you see the composites industry evolving over
the next 5-10 years, and how
will this affect the development
of FMG's business?

D. S. : The traditional answer

is a long list of technological
innovations - improvements
in curing time, new automated
processes, and the application
of nano- and bio-materials for
example. But FMG provides
commentary on the commercial drivers for composites,
covering a broad range from
social and economic influences,
to specific industry needs that
differ across niches, and sectors,
and by geographies.
Our analysis shows aerospace
continuing at its present rate,
adding at least one new carbon
fibre line every four years. But

No101 November - December 2015 /

if automotive adopts at its more
aggressive rate, we are forecasting a new line needed every
two months.
We look at how the industry
will evolve, and why, and what
will be the business implications
for companies, users, investors
and legislators. As the industry
moves from small runs to mass
production, from thousands
of medium-size suppliers to
consolidated supply chains,
and enters new markets and
application areas, we will see
much greater concentration on
cost. Not just the price of parts
but the cost of doing business,
scaling up, meeting standards
and quality control, and investment in innovation, to continually outpace competition. The
opportunities are important
to know, and that's what most
market reports will show, but
the blockers and hurdles are just
as key to growth and success.
We develop strategies taking
both into account.
Future Materials Group is
always looking at the horizon.
We are interested - on behalf
of our buy- and sell-side clients
- in longer term opportunities.
Investment banks, for example, prefer to get involved with
near-term transactions and
service a hundred clients to
achieve a couple of deals. FMG
is committed to getting the best
possible deals for our clients.
We plan to be involved in many
more mergers and acquisitions.
But FMG are working hard to
help companies of all sizes grow
and prosper in a composites
marketplace that is expanding in
many areas even faster than any
consultancy predicted. It is why
our name starts with Future. n
More information:
www.futurematerialsgroup.com

jec composites magazine 5

http://www.istock.com/FauxCaster http://www.futurematerialsgroup.com

Table of Contents for the Digital Edition of JEC COMPOSITES MAGAZINE - Issue #101 - November/December 2015