Taipei Times (TT): What are your observations regarding industrial transformation?
Patrick Thomas: Many industries develop around electronics and I think it is a very interesting issue to face the changes in the electronics industry nowadays.
Typically, your mobile devices are going to be used for only three years and I think the life cycles are way too short. People change their mobile phones just because of fashion, but in fact, everything can be upgraded through continuous software updates.
Photo courtesy of Covestro AG
I have heard that there is a component-based company in the Netherlands that makes smartphones. It is sensational that you can replace phone components by yourself. It takes you just several minutes to change a phone battery or upgrade your phone from 4G to 5G with a standard screwdriver. That technology is the way of the future.
You need to make electronic devices stylish, as they are still fashionable objects, but you also need to make them easy for customers to disassemble, repair and upgrade.
We did concept cars recently on the same principle of providing more sustainable products, because cars in the future will last a lot longer as well. People are not going to own vehicles; they only want cars for commuting.
The same challenge will come to the computing and mobile device sectors. My personal view on the reason why Apple Inc’s new iPhone will be near a thousand US dollars is that the firm actually wants you to lease the products, not buy them. Those IT companies hope to sell content instead of devices. I think the whole business model will change in the future as product longevity becomes more important for people.
TT: Do you suggest that Taiwanese companies change their mindsets?
Thomas: You can see that Apple specifies the functionality, while Taiwanese suppliers like Foxconn Technology Group (富士康) work on the base that they must reduce costs of components by about 4 percent every quarter. The process is very productivity-driven.
Actually, Apple needs to worry about the situation, as that is not what the firm wants to achieve. The company wants to achieve longer-lasting products, innovation and brand loyalty.
I think those suppliers need to be more influential with their brand customers. Very often there is a mismatch between the people doing manufacturing in supply chains and the people managing the brand. That is very dangerous and you have seen lots of examples.
For instance, Nike Inc gets into trouble with Greenpeace, [which says] the firm’s shoes are assembled by children, who become addicted to solvent from adhesives. A lot of scandals came as major brands lose control of their supply chains.
The responsibility of the supply chain is critical to the protection of the brand. If you get things right, that delivers brand loyalty.
TT: What are your views on Taiwan’s position in the global economy?
Thomas: Taiwan does not possess abundant natural resources, but the great thing about Taiwan is the intelligence and education of its people.
Foxconn has 50,000 Taiwanese engineers to work on the manufacturing of iPhones. The firm hires Chinese labor to assemble components, but the intelligence of the manufacturing processes comes from Taiwan.
That is why you need to think about developing a knowledge-based economy much more. It is the knowledge that really drives economic growth.
Taiwan also has one thing historically: the ability to change and adapt.
Think about the phase-out of big CRT [cathode-ray tube] screens. Those products used to be all made here and Taiwan nearly has a world monopoly on computer screens.
When the old technologies went flat and were gradually replaced by more advanced ones, those screen makers just moved on. I think it is a healthy culture that Taiwanese companies can always move forward, despite the environmental changes.
TT: Covestro has been doing business in Taiwan for more than 50 years with a wide range of industries. Which sector does the Changhua plant focus on?
Thomas: The Changhua plant is Covestro’s largest production base to make thermoplastic polyurethane [TPU] in the Asia-Pacific region. We also run a TPU research and development center for developing high-end materials at the site.
Compared with another Japanese team specializing in TPU fabrics, the Changhua facility has a focus on special materials for products made in the electronics and shoemaking industries, as Taiwan is a world hub for electronics and sports footwear.
To meet rising customer demand, we are working on an expansion project for the Changhua site, which is expected to boost its annual TPU capacity from 18,000 tonnes to 23,000 tonnes by next year.
TT: What are the applications of TPU in daily life?
Thomas: TPU is a very interesting material, because you can make hundreds of adhesives and components from it. The elastomers can be used in a massive number of products, such as footwear, medical dressing for wounds and smartphone cases. There is almost no other new material that achieves such great flexibility, water resistance and all the protection you want for your devices.
TT: Are there any trends in applications of TPU?
Thomas: We have already been working on the research and development of smart textiles and wearables.
For example, TPU non-woven fabric is a kind of very thin filament that has a whole lot of new applications coming in textiles, such as more comfortable disposable diapers. There is a strong similarity between TPU non-woven textiles and spandex.
Covestro also develops a comprehensive range of TPU powders for 3D printing. We just produced a 3D-printed dress for Paris Fashion Week this year, which was made up entirely of TPU fiber.
TT: Taiwan’s manufacturing sector is undergoing a fundamental transformation. What role can Covestro play in Taiwan in the future?
Thomas: As Taiwan develops its energy policy, there are a number of opportunities for us to bring our expertise from other parts of the world. We have about 1,000 people worldwide to do research and development work and they are spread in numerous locations. Each of them has their own specialty.
For example, Taiwan is starting to invest in wind power and that is going to be a domestic industry in the future. We have technologies for making resin used in wind turbine blades. Compared with traditional epoxy resins, our resins are fabricated with polyurethane and feature fast curing properties, which shortens the production-cycle times required for wind turbine blades.
Covestro also develops elastic materials to absorb the effects of raindrop damage, as we found that many windmills have failed because of rain erosion.
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