Unravelling Polymers

The Definitive Blog on Polymers by Poly Fluoro Ltd.

Is Covid 19 the last nail in China's manufacturing coffin?

For anyone in manufacturing, the China threat has been genuinely concerning for decades now. It almost makes no sense to manufacture something that the Chinese already supply. Yet, Indian companies have hobbled on, using a mixture of proximity and good customer service as a way to hold on to clients.

It is precisely for this reason that most successful manufacturing outfits have survived or even thrived by staying one step ahead on the value chain, or by investing efforts and capital in technological differentiation. 

In our own example, Poly Fluoro withdrew from the manufacturing of what we call ‘stock shapes’, back in 2007. Stock shapes are typically items like polymer rods and sheets, which come in certain standard dimensions. It was our understanding that the commoditisation of this space would drive margins so low, that the slightest shift in the market could lead to unmanageable losses. Furthermore, we perceived a genuine dilution in the quality metrics. This made it impossible to compete with Chinese material, which would often be substandard, but marketed in such a way that the end-users would be unaware of the same.

One offshoot of this was seen in the PTFE (Teflon) industry, where the proliferation of reprocessed, or recycled, material had started eating into the market for genuine material. Since there was anywhere between a 15% to 40% price difference between reprocessed and genuine PTFE, competition became impossible, unless the end user was discerning enough to demand the right quality, and knowledgeable enough to test for the same.

Rather than compete on volumes with Indian companies as well as traders who imported in bulk from China, Poly Fluoro invested in technologies such as PTFE extrusion, CNC machining, injection moulding, PEEK moulding, and expanded PTFE (ePTFE) manufacture. In some cases, we spent months or even years developing new processing techniques in-house. While these technologies are also available in China, our aim was to develop the same for high-precision products aimed at clients for whom quality was the key concern. In doing so, the China threat was minimised.

Other Indian companies, who have continued to take the China challenge head-on, have suffered.

Off late, however, multiple factors have started to chip away at the Chinese advantage. These have allowed Indian companies (and indeed companies everywhere), to realise that the China threat was never about fundamentals. In other words, we were not disadvantaged by higher productivity, or more streamlined operations in China. Rather, the competition was largely man-made.

  1. Lower labour costs

    Along with India, China has always promoted the idea that their labour is cheaper. While this is certainly true when we compare them with the West, the fact remains that for many years, Chinese labour laws were extremely exploitative. In contrast, Indian firms have had to conform to things like ESI and PF, where both health insurance and provident fund contributions were mandatory for any firm hoping to compete globally.

    The recent introduction of social security in China has pushed up the labour costs there, to the extent that the difference between India and China is now negligible. Indeed, we have recently received requests from Chinese companies for machined parts. When we inquired, sceptically, why they would want to come to us, we were told that machining costs have increased significantly in China.

    China’s push to appear more like a global super power and less like a low cost country has also impacted this. Fewer youths are interested to work in manufacturing, causing labour rates to spike. India still has a large labour workforce who, if supported ably by minimum wage laws, still see manufacturing as a profession worth getting into.

  2. Environmental concerns

    In 2016, the PTFE industry was rocked by capacity constraints caused by the shutting down of three large raw material manufacturers in China. The revelation here was that these plants had been flouting environmental laws and dumping effluents in nearby rivers. The moment the companies were held accountable, the price of Chinese materials began to rise. Again, India’s only PTFE raw material manufacturer – Gujarat Fluorochemicals – had installed a state-of-the-art plant that conformed to all the environmental requirements from day one.

    Again, it is no wonder that Indian firms were struggling to compete, considering the cost benefits afforded by ignoring regulation. Once the rules were followed, the cost advantage immediately eroded.

  3.  Government subsidies and currency

    Customers often ask us why we in India are unable to compete with Chinese companies. To this, our reply is simple: “We are not competing with Chinese companies, we are competing with the Chinese government”.

    Given the extent of subsidies and drawbacks thrown on Chinese exporters, it is hardly fair to expect an MSME in India to have there wherewithal to engage competitively. Despite this, we are often told that our prices are only 10-15% higher than the prices from China. In other words, with subsidies in the range of 30-35%, Indian firms are still able to harness our productivity and ingenuity to remain somewhat competitive.

    In addition to subsidies, the Chinese currency has been consistently pegged below its true value, lending another blow to Indian manufacturers when we quote clients in US$ or Euros.

  4. Social issues

    Finally, there is little doubt at this time that working with China raises some serious doubts with regards to what we are encouraging. Although this is not a cost concern, companies in the West need to start acknowledging that in encouraging China, we are giving indirect approval for a host of human rights violations that have now become too obvious to ignore.

    With the advent of the Covid 19 crisis, the world needs to take an even sterner view regarding China trade, since it appears that there is very little accountability internally for the manner in which they operate. Even now, as the cases spike around the world, China remains stoic in claiming that they have nearly eradicated the virus within their own borders.

    Regardless, we have heard of many cases where companies in Europe and the USA have gone right back to buying from China, because the economics are favourable.

    While there are definitely calls for companies to pull manufacturing operations out of China and move them to countries like India, it remains to be seen whether these are genuine or simply lip service during a time where anti-China sentiments are everywhere.

The aim of the article is not to put down China, or to claim that they do not deserve to compete in global trade. However, with so many factors benefiting Chinese manufacturers, the world needs to even the playing field by insisting that Chinese companies play by the same rules as the rest of us. As Indian manufacturers, we’re happy to complete on a level footing. What we cannot be expected to do is survive against competition that is so unfairly stacked against us using man-made economic measures.

ePTFE Membranes - Application in high-end face masks

With the recent advent of Covid-19, there is a significant strain on resources pertaining to either the prevention or containment of the virus. 

One of the key shortages highlighted has been around face masks, where some experts have suggested that if the pandemic continues to wreak having, the US presently has only 1% of the face masks it would need.

This shortfall has led to opportunistic behavior, such that the price of face masks has more than quadrupled in the past three weeks. As a result, good quality masks are not only scarce, but are being sold at an unimaginable premium.

Enter ePTFE membranes.

While ePTFE itself is not a low-cost material, its application in face masks could be revolutionary and allow for a very effective product in fighting the current crisis. The reasons for this are as follows:

  1. Permeability – ePTFE has a unique property of being impervious to liquids, but permeable to gases. Since Covid-19 is known to be spread by droplets in the air, ePTFE forms an ideal medium to arrest the passage of droplets

  2. FDA approved – as PTFE is an FDA approved material, it poses no risks to being used in face masks. Indeed, PTFE is one of the few materials that is approved for insertion into the human body, making it completely safe for such an application

  3. Hydrophobic – not only is ePTFE resistant to droplets, it is hydrophobic in nature, meaning that droplets that do reach it are immediately repelled. Hence, there is less risk that an infected droplet would remain on the surface of the material. This allows the face mask to have a longer lift, as there is less chance that the infection stays on the surface of the material.

  4. Low cost – as mentioned, ePTFE is itself an expensive material. However, when used in a small quantity – such as would be needed in a face mask – the price is negligible when compared with standard face masks

With the current crisis in play, it is essential that newer and more effective materials are brought into action. ePTFE is one such material, as it can be manufactured in bulk and embedded into a standard non-woven polypropylene mask to give a manifold improvement in protection, while adding very little in terms of cost.

By our estimate, a simple ePTFE lined face mask should cost nothing more than US$0.2 per piece – which is a far cry from the US$2-3 we are currently seeing for high-end masks on the market.

Demystifying IGLIDUR

We have earlier looked at Turcite B* and Rulon and explained how they are the result of branding exercises that were set in place at a time when the polymer space was more obscure. In both their cases, we find that even today, older drawings received from OEMs will specify the brand and grade to be used and it usually takes some convincing and possibly development and trials on the part of the OEM to shift to an alternative.

Both Turcite and Rulon, as we illustrated in earlier articles, are PTFE based materials. In some cases, specific pigments have been added to the material to enhance wear properties and offer a visual uniqueness to the grade that other processors might struggle to match. It should be mentioned that especially in the case of Turcite, the distinct turquoise pigment used brings certain synergies with the base PTFE material, causing the wear properties to increase significantly in comparison with other pigments. However, there is no restriction as to who can either procure, compound, or process these pigments with PTFE to ensure the same properties are met by other manufacturers.

What is IGLIDUR?

More recently, as we have ventured further down the path of precision machined components, we have had many OEMs asking us for IGLIDUR material. An initial glance through IGLIDUR’s properties told us that here too, a very significant branding push had been given to re-market generic polymer materials. We also realized that IGLIDUR – manufactured by IGUS in Germany – was priced at several multiples of the cost for a comparable grade bought locally.

While there may no doubt be certain base properties or processing techniques used in the manufacture of IGLIDUR that enhance the properties over a generic substitute, the sheer cost difference makes for a compelling case for OEMs to look beyond the brand and evaluate whether an alternative will suit the application.

Below, we list a few of the most common grades of IGLIDUR. Mapping four key properties, we are able to identify – with some certainty – the generic polymer base for the grade. 

 

 

Colour

Specific Gravity

Max Service Temperature (°C)

Tensile Strength (Mpa)

Comparable Material

Iglidur J

Yellow

1.49

120

73

POM / Acetal / Delrin

Iglidur X

Black

1.44

250

170

Carbon PEEK

Iglidur G

Grey

1.46

130

210

PA66 40GF

Igludur P

Black

1.58

130

120

Carbon Filled POM/PA66

Igludur K

Yellow/Beige

1.52

170

80

PES/PESU

For the most part, IGLIDUR grades appear to use either Nylons of Acetal for the base material. In one case – IGLIDUR X, the high service temperature gives away the fact that it must either be PEEK or Polyimide. Similarly, IGLIDUR K, has a high service temperature, but relatively low tensile properties. However, the yellow/beige colour suggests that Polyethersulfone might be the most possible base polymer for this grade.

It should be said that there may certainly be property enhancing additives used in these grades to improve overall performance. However, as mentioned above, any product today can be tested to uncover the true composition of the same. With the composition no longer a mystery, any premium paid would be unjustifiable.

Armed with this knowledge, an OEM can at least begin the process of identifying an alternative. In most of these cases, the grades are easily available from generic stock shape manufacturers. Hence, a proto batch of 20-30 components would be easily developed and can be put under testing without the need for expensive tooling or R&D costs.

Considering the above, there appears a lot of room for exploration for OEMs that are using expensive components because the brand is obscure. IGUS does not easily share the base material used in its products, which might leave many end-users thinking it would be safer to pay the premium and get the right part. However, with the information available today, there is no reason for an OEM to pay many multiples on the cost.