Market surveyBUSINESS

26 JEC - Composites / no 19 August-September 2005

AN INTERVIEW WITH

DOUG MATTSCHECK,PRESIDENT OF AGY,

AND DREW WALKER,VICE PRESIDENT,

SALES & MARKETING

JEC Composites Magazine: At the JEC Composites Showthis year, you announced an additional manufacturingcapacity expansion of 10% for S-2 Glass® roving, on top ofthe 25% announced the previous fall. Will those increasesbe sufficient? Doug Mattscheck: Our forecasts tell us those increases will besufficient, but if they are not, we’ll add more. Our willingnessto meet the market’s need with additional capacity is based on three factors. We know the market needs a dependable and predictable supply of high-strength glass fibre on which to base material decisions. To grow the market, we need toassure our customers that they will be able to get materialwhen they need it. Another factor is our company’s “scalable”capacity, which means we can add small increments of capacityrapidly; we don’t need a major leap in demand to justify increasingour capacity. The third factor is our lean, nimble and indepen-dent organization. We can make capacity decisions relativelyeasily and quickly compared to some larger and more complexorganizations.

J.C.M.: Which sectors – marine, transportation or defence,for example – are driving market demand at the moment? Drew Walker: The two most active sectors in the first partof this year have been aerospace and defence, specificallynew aircraft and ballistic protection. The Airbus IndustriesA380, which made its maiden flight in the same month asthe recent JEC Show, is a good example in the aircraft cate-gory. Our proprietary S-2 Glass® fibre is part of the GLARE

(GLass and Aluminium Reinforcement) system used in thefuselage between the cockpit and the leading edge of thewings, and also in the front of the vertical stabilizer. S-2 Glassyarns and other AGY products are also being used in interiorapplications on this cutting-edge aircraft. Looking at themarket as a whole, the good news for us is that aircraftengineers are incorporating more glass fibre into their newmodels, and aircraft manufacturers are building more planes.

Military conflict has stimulated the market for ballistics, ofcourse, but we also see signs that civilian security concerns arefuelling market growth. Key applications in the armour andballistics market include the Humvee and Stryker vehicles;there are now 23 licensees for our HJ1 armour system, up from17 last fall. Parts include appliqué panels for doors, hatches,covers and spall liners for vehicle applications on both theHumvee and the Stryker.

J.C.M.: In your opinion, how will market demand developover the next six months or so? D. M.: That’s an important question and we gave it a lot of thoughtas we developed our capacity expansion and production plans.We expect the current economic expansion to continue in thesecond half of the year. As we said earlier, the aerospace anddefence markets are strong and expected to continue to bestrong, and we also expect continued strength in the industrialand construction markets. And regardless of what happenswith the overall global economy, we will do our best to see thatthe composites market grows at a faster rate.

D. W.: There are a couple of new applications on the near-termhorizon that could certainly help the growth of compositesoutpace the economy. One is in the electrical distributionmarket in an application that really hasn’t had much atten-tion in the past. We hope to be able to talk about that publiclyvery soon.

After several years of uncertainty, AGY is entering a new era, confident that it and its products can meet the ever-increasing expectations of the market. Since the company appointed new vice presidents for the Technology, Operations,and Sales and Marketing departments, made changes to its commercialorganisation and gradually increased its S-2 Glass production capacity, JEC Composites Magazine decided to find out more. At the JEC Composites Show2005, we met with Doug Mattscheck, president of AGY, and Drew Walker, vice president, Sales & Marketing.

“AGY is confident that it can meet market needs”

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no 19 August-September 2005 / JEC - Composites 27

Gordon Composites (Montrose, Colorado, U.S.A.) has also beenworking in thermoplastics processing and sees so much potentialin the material that they started a whole new business – namedPolyStrand, Inc. – to focus on thermoplastics using a processthey perfected. They are producing ballistic material using S-2 Glass and thermoplastic resin that has a much faster mouldcycle; than traditional ballistic material using epoxy and other

thermoset resins. The applica-tion offers a tremendous amountof cost-effective protection. Weexpect that application to opena lot of eyes to the potential forhigh-performance thermoplasticapplications. PolyStrand has notfully developed the new techno-logy but they are already doingwell with NIJ level IIIA testing.Level III testing is also plannedonce the company has appliedand tested what it learned inlevel IIIA testing. When the firstapplications reach the marketwe expect them to open a lotof eyes to the potential forhigh performance thermoplas-tic applications.

J.C.M.: Which geographical areas are most dynamic?D. W.: We see demand growing in all areas of the world but weare specifically focused on growing our business outside theU.S. Earlier this year, we strengthened our commercial organi-

J.C.M.: What is happening with the wind energy initiativethat was announced last fall?D.W.: Our wind energy initiative is going well. As it is with allmarket development activities, such work takes time and weare limited in what we can release because of confidentialityagreements we have with our customers. We do have projectsunderway with multiple development partners. Ten monthsafter announcing the initiative,we are even more convinced thatthe long-term trend favourshigher-performing materialsdue to the movement to largerblades for increased generatingcapacity.

J.C.M.: Do you observe a difference in thermoplasticand thermoset demand?D. M.: Historically, demand for high-strength glass fibrereinforcements has come almostexclusively from thermosetapplications. We see that begin-ning to change and emergingtechnology could very wellaccelerate the shift to reinforcedthermoplastics.

By emerging technology I am referring to processes like DRIFT(Direct Reinforcement Fabrication Technology), and otherlong-fibre thermoplastic (LFTP) processes.

AGY makes S-2 Glass reinforcements and yarns at its plant in Huntingdon,Pennsylvania, USA.

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AGY further expands S-2 Glass® manufacturing capacity

In response to continued growth in the use of high-performance glass fibres for composite reinforcement, AGY has increasedpreviously announced capacity expansion plans for manufacturing S-2 Glass products. The new expansion was announced lastApril at the JEC Composites Show 2005. Upon completion in July 2005, total capacity for production of S-2 Glass reinforce-ments will have been increased by 35% during an 18-month period.In October 2004, the company announced a total increase in capacity of 25%. Since that time, adjustments of an additional 10%have been made to the expansion plans, and the overall project timing has been brought forward about 6 months, as the com-pany continues to respond to the changing market demands.

The standard for high-strength, high-performance glass fibre reinforcements, S-2 Glass has provided outstanding performance across many applications served by the global composites market.Originally developed for military applications in the 1960s, S-2 Glass was first introduced to the commercial market in 1968.Initially compatible with epoxy resins, its compatibility has been expanded to include thermoplastics, polyesters and vinyl esterresins. The high-strength, high-performance product is used in a variety of markets including aerospace, defence, marine andrecreation. S-2 Glass is made exclusively by AGY and has a tensile strength that exceeds that of standard-modulus carbon fibre as well asmost grades of aramid fibre. Its impact strength is similar to aramid fibre and its elongation-to-break performance is 5.7%compared to aramid’s 2.8% and carbon’s 1.5%, meaning that S-2 Glass will give significantly under strain before failure.

Market surveyBUSINESS

28 JEC - Composites / no 19 August-September 2005

support, a flexibility to supply what the customer needs, andto provide a local source of supply and service to our customerbase. Our strategy is to focus on the value we provide to ourcustomers and to increase that value proposition in the face ofcompetition.

In terms of competing with the large companies, the strategyis pretty clear. We will be fast, flexible, close to our customers,responsive to market changes and leverage the advantages wehave as the only major independent glass fibre producer in themarket.

J.C.M.: Are there any new developments with Beta® yarnand vinyl-coated yarn?D.W.: We have a number of Beta yarn projects going at themoment as designers become more and more comfortable witharchitectural fabrics as a design alternative, and as the need for new, lighter-weight material continues to surface. Stadiumprojects in China and Germany, airport projects in Thailandand California, and smaller shopping pavilion projects inSaudi Arabia are all underway with Beta fabrics.

Vinyl-coated yarn continues to be a strategic focus for AGYand is a significant part of our re-organization for a growthfocus in the commercial and technical functions.

J.C.M.: Do you have anything special you’d like to say to the readers of JEC Composites Magazine?D. M.: AGY emerged from Chapter 11 a little more than oneyear ago (April 5, 2004) as a financially sound, independententerprise. Since then, our performance and our actions haveresulted in an even stronger company. AGY is a profitableenterprise. It is a nimble company today that is willing to workwith customers to develop new applications and help grow themarket. We would love to hear from your readers if they havean idea that will help grow the composites market.

D. W.: I would encourage the materials specifiers among yourreaders to not overlook glass fibre based solely on their expe-rience with E-glass. They may be able to get the increased performance they are looking for without making the jump to higher-priced aramid and carbon fibres. Lots of engineersare finding every day that there are cost-effective alternativesto those higher-priced materials.

zation with that objective in mind. One of the key elements ofthat change was establishing a new business development teamthat will work closely with the existing commercial and productmanagement teams.Multifunctional business teams have been set up to capitalizeon key strategic applications, new product opportunities andnew technologies uncovered from a more focused new businessapproach. With representation from sales, marketing, technology,manufacturing and finance, the new business developmentteams will focus on the strategic growth opportunities we haveidentified.

D. M.: A key objective for the AGY team as we move forwardis to identify and secure profitable growth opportunities andthe new business development team will provide the focus weneed to make that happen. In addition, we revised our commercialorganization to provide for long-term growth and customer focusinternationally. To that end, we are realigning our sales organi-zations for Europe and Asia to manage growth in those areas.

J.C.M.: Do you plan to invest soon, and what are AGY’smain objectives?D. M.: Our capital expenditures are currently focused on addingcapacity for S-2 Glass roving and yarn. That is our most immediateneed. Beyond that, we are looking for the right opportunity toexpand our manufacturing base into our key regional markets.We are determined to become a more balanced global company,and at the present time the majority of our sales are in the U.S.and all of our manufacturing capacity is based there. We needto change that to become the kind of global company we wantAGY to be.

J.C.M.: How does AGY plan to compete with the lower-costfibre producers, and with the large integrated companies?D.M.: The key strategy for AGY is to continue to provide notjust a material, but an overall material solution. This includesa high quality level, a high level of technical and customer service

More information...More information...

AGY has stepped up plans to increase capacity for its proprietary highperformance S-2 Glass reinforcements and yarns.IN

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