Emitec has come full circle. In an Upfront conversation, KVR Babu, Managing Director at Emitec Technologies GmbH speaks to Ashish Bhatia on the road ahead as an independent high-quality catalyst substrate supplier once again.
Q. What were the driving factors behind the decision to establish a new, independent company by separating from Vitesco Technologies?
A. Emitec has once again become an independent legal entity with effect from August 01, 2023, as it was before the acquisition by Continental AG in 2014. The current management team, all production sites (Lohmar, Eisenach and Pune), the worldwide offices and all existing jobs are retained. With this transition, Emitec can pursue its aim of strengthening its market position as a long-term partner and supplier for high-quality catalyst substrates for clean combustion in the legacy powertrain technology sector as well as in electrification technologies for sustainable mobility and non-automotive applications.
Q. To what extent have you retained the core DNA of the original company? How do you plan to maintain this essence while also exploring new areas that may not be part of the core focus area?
A. Emitec’s core DNA is the engineering capability and having a state-of-the-art technical centre to develop new technologies and applications. Emitec has been maintaining its systems, and operating procedures for the development and introduction of new technologies and will continue to follow the same in future. While Emitec is a leader in metal substrate technologies for automotive and off-road applications worldwide, Emitec in India has been primarily catering to two- and three-wheeler segments so far. We are now extending our focus in India to Medium and Heavy Commercial Vehicles (M&HCVs), off-road segments with the introduction of large diameters and new turbulent structure technologies. Emitec in Germany will use its in-depth knowledge of materials and their applications to further diversify its portfolio beyond powertrain usages like chimneys, solar plants, flow straighteners etc.
Q. How do you intend to capitalise on your strengths in collaboration with the DUBAG Group to advance clean combustion and sustainable mobility solutions?
A. Now, Emitec is owned by Munich-based investor Lenbach Equity Opportunities II GmbH & Co KG (LEO II fund) managed by the DUBAG Group. LEO II is a long-term-oriented investor with a focus on industrial and manufacturing companies. With this acquisition, Emitec will have independence in developing new substrate technologies and continue to expand its market and customer base globally.
Q. Could you provide an overview of the substrate technologies in your development pipeline?
A. New technology introduction for automotive applications in Europe is ‘Electrically Heated Catalyst (EHC)’ and ‘Electrically Heated Disc (EHD)’ for the EU VII application. In addition, a new turbulent structure called CS Structures for catalyst system cost optimisation is under development, which will be used extensively to support global customers, including India. Emitec in India is developing substrates with bigger diameters and higher CPSI using turbulent structure technologies having a primary focus on M&HCVs and off-road segments.
Q. How do you envision these technologies differentiating you from competitors and aiding expansion into new customer segments?
A. Emitec has always been ahead of its time in developing and introducing new substrate technologies. All our technologies are developed with a focus on delivering value through performance, durability, and application orientation. We will continue our development keeping in mind the future requirements of specific markets and applications worldwide.
Q. With the backing you have, what level of confidence do you possess in your ability to attract investments across both automotive and non-automotive sectors?
A. DUBAG Group has invested with a long-term vision in Emitec and will support all future new product development activities for various automotive and other market segments.
Q. How do you plan to penetrate diverse segments from two-wheelers to three-wheelers and LCVs, and M&HCVs, given their contrasting natures?
A. Emitec India continues to focus on maintaining the current market share of more than 60 per cent and plans to grow further in the Indian two-wheeler market. In addition, the focus would be to expand the capabilities to cater to the ASEAN region. The emphasis would also be on the larger diameter substrates with new structures needed for segments like LCVs, and M&HCVs, off-road tractors in the future.
Q. How are you managing the challenges posed by varying compliance requirements across different markets, especially with the introduction of electrically heated and closed coupled compact catalysts?
A. All products are qualified at our technical centre before introduction in the market. Electrically Heated Catalyst and Closed Coupled compact catalyst introduction in the majority of programs are being planned with our customers as joint development programs. This builds the confidence of OEMs in products for the introduction of their vehicles in different markets for different regulations.
Q. Is the ultimate goal of cost optimisation being jeopardised by inflationary pressures and supply chain bottlenecks?
A. In the last two years, commodity prices have increased rapidly due to multiple factors, this has impacted us and our customers also. Nevertheless, we were continuously engaged with the customers during these times on cost optimisation programs to minimise the impact. Raw material prices are getting stable now and our cost optimisation programs will further benefit customers and Emitec together.
Q. Are the benefits of free trade being hindered by increasing protectionist measures in various markets?
A. Our basic ingredient for manufacturing substrate is steel. We use special grades of steel suitable for high durability and performance. Though there are certain challenges from an import and export perspective, we still try to mitigate the risks within the framework of FTA between the countries.
Q. As a market leader in your segment, what growth opportunities and challenges do you foresee for both your company and the industry at large?
A. At large, opportunities for Emitec come from the new legislation and regulations from the automotive and non-automotive markets. The emission legislation is continuously getting stringent in different parts of the world. Emitec is a leading and largest manufacturer and supplier of metallic substrates with the largest global market share. We are aiming to increase the turnover by more than 30 per cent in the next three to five years with these opportunities in the near future. The biggest challenge we foresee is any trade restrictions on steel products by respective countries to safeguard the interest of local entities. In-depth experience in material development will help us to overcome these challenges in partnership with our customers. ACI
