ALTANAs Understanding of Innovation
As a focused specialty chemicals company, ALTANA offers its customers highly specialized technological solutions in niche markets. Due to this business model, innovation is an important element of the company’s corporate strategy, ensuring that ALTANA will keep growing in the long term and remain the technology and market leader. ALTANA is therefore a research-intensive company, which is reflected by the fact that 5 - 6 % of its sales are invested in research and development – around twice as much as the industry average.
ALTANA’s Understanding of Innovation
Within the framework of its research and development efforts, ALTANA invests in generating knowledge. This results, for example, in inventions that ALTANA protects with patents as intellectual property. But this does not earn the company money. On the contrary, research initially means spending money to generate knowledge.
Unlike a discovery or an invention, however, an innovation is marked by the fact that the knowledge generated creates value or benefits for our customers and for ALTANA. With the innovation, therefore, knowledge is converted into value or benefits.
Two further aspects are important in this context: future market needs and available key technologies. A company must know what its customers need – now and in the future. Consequently, innovations are market-driven, subject to so-called market pull. On the other hand, the company has to know which new key technologies are available that it can use to meet these needs as efficiently as possible – technology push.
Market pull: penetrating new markets with new products and increased expertise
In the business world, the share in total sales that new products achieve is often the criteria by which a company’s innovativeness is measured. But since views can differ widely about when a product is new, this gauge has to be viewed in a very differentiated way.
It is important to know what is understood by the words “new product.” In temporal terms the term refers to a presence on the market of a few years. A product can be regarded as new if the characteristics of an older product are changed. Efforts to generate a new product are therefore very dependent on the kind of product it is. It can be significantly more time- and money-consuming to develop a new coating additive than, e.g. to change a coating by adding a new additive. In both cases the result is a new product. To assess the innovative performance of an additives manufacturer or a coatings manufacturer, one should therefore not think solely in terms of the respective new product’s share in sales. With this proviso, at ALTANA a share of 15 % to 25 % is realistic, depending on the division.
So far, a large part of our research projects have been connected with a relatively low risk: The company is concentrating on issues in which it has high competencies and behind which an attractive market is seen. This procedure is sensible and a very essential component of ALTANA’s success. But it does not exhaust all possibilities. For only those who venture boldly into new areas gain sustainable advantages over the competitors. Normally, corporate opportunities are connected with risks. Given the increasingly dynamic markets – particularly in Asia – we have to venture into new territories and come up with more innovations.
It is not a question of pushing forward into completely new fields of business or striving for completely new business models. ALTANA is always acting close to its core competencies. At the same time, however, we have to venture more boldly into new areas. To minimize risks at the same time, we have to invest in expanding ALTANA’s core competencies, that is, acquire know-how and gain experience. This can help us open up additional attractive markets and achieve the growth goals we have set ourselves.
Technology push: ALTANA is banking on new key technologies
To remain fit for the future, i.e. to continue to serve the markets in the future and meet the needs of our customers with the most efficient methods and technologies, we deal intensively with new key technologies such as nanotechnology or industrial biotechnology.
Nanotechnology itself does not represent a market. Nanotechnology is a key technology that opens up interesting opportunities to all our divisions so that we can meet existing and new customer requirements. It can serve to heighten the thermal stability of coatings as well as their scratch resistance and conductivity. But that is not everything that is of interest to us as a company. We cannot only offer our own products with improved characteristics due to nanotechnology, but also support our customers in handling their own nanoproducts. This is also a very interesting business field. For with our know-how regarding surfaces we can help other manufacturers formulate, say, recipes containing nanoparticles so that the nanoparticles remain finely distributed and do not join together, as is their tendency, into agglomerates.
We have also thoroughly evaluated industrial biotechnology as a key technology and are in the process of building a platform for it within the Group. Here, too, we see many interesting possibilities for ALTANA. We will develop our activities in this area in a targeted way.
More than the sum of the individual parts: synergies make us stronger
Sensibly combining and utilizing the existing knowledge in the entire Group is an important factor for ALTANA’s future success. We possess synergy potential and want and have to utilize it. A good example is the emerging market for polymer electronics. Once there is sufficient business potential, interesting possibilities for collaboration between different divisions can arise. We have taken a number of measures to promote such cooperation. With these moves, we seek to further promote innovation culture and innovative action in the company. A key component of these measures was the founding of the ALTANA Innovation Council in 2008. This committee, to which all of the ALTANA Group’s CTOs (the chief technology officers responsible for research and development) belong, ensures that the entire innovation process at ALTANA functions smoothly. For example, we established an R&D fund with which ALTANA purposefully promotes projects across divisions. At least two divisions have to be involved in a project in order to receive Group funding.
Another huge success is the yearly upcomming ALTANA Innovation Conference staged by the ALTANA Innovation Council at the beginning of November. A total of 145 participants from many countries in which ALTANA is active, including the members of the Board of Management and the Executive Management Team, as well as researchers, engineers, and application specialists, attend the conference. During the event, we not only engaged in professional exchange, but also expanded our personal network. At the same time, we intensively discussed new applications, technologies, and ideas for new projects. With the ALTANA Innovation Award, which we present at the ALTANA Innovation Conference, we honor outstanding projects.
"Our intensive exchange of information and the close cooperation guarantee an efficient know-how transfer within and between the divisions." Dr. Peter Jenkner, CTO ACTEGA (left), Dr. Horst Sulzbach, CTO BYK (right)
Thinking ahead together with partners: ALTANA is utilizing external networks
Our own research activities, utilization of joint knowledge of our divisions, and close cooperation with our customers are at the center of ALTANA’s innovation activities. However, we intend to cooperate increasingly with external partners, where it is sensible and beneficial, provided that we can protect our know-how. Within the framework of the Open Innovation approach, ALTANA will work together increasingly with institutes of higher learning, research institutes, as well as other companies. We see the purchase of know-how or technologies as a further option. In addition, the possibility of taking part in publicly sponsored joint projects will be a component of our innovation strategy. The path we choose in each case depends entirely on the requirements and the possibilities. What is certain is that it will become more and more important for us to benefit in an appropriate way from external networks and cooperative ventures and to make an active contribution.
Overall, we believe that with the approach described above ALTANA is in a good position to master the challenges of the markets in the years to come.
"We collaborate closely on related technology projects and exchange our knowledge across our divisions.“ Dr. Jürgen Omeis, ALTANA (left), Dr. Stefan Trummer, ECKART (right).
Apart from cultivating and expanding our traditional markets, we are always interested in discovering and moving into new niche markets, because this helps us achieve sustainable, above-average growth. And when we open up a new market for ourselves with a known product (the way BYK did in the paper segment, for example), or penetrate new markets with a new product (as in the case of ECKART’s inkjet inks with a metallic effect), this is also an innovation in the definition provided above. We can also achieve sustained growth by entering newly developing markets, the so-called emerging markets. We intend to step up our efforts to do so in the future. The time horizon, however, is five or more years. To be successful in these fields, ALTANA has to start building appropriate internal and external cooperation networks today, and to develop scenarios in which these markets open up to us.
The abovementioned polymer electronics or organic electronics, in which electronic switches, components, or entire electronic devices are manufactured in cost-effective printing processes, is a good example of an emerging market. Possible applications in which our technological solutions could be incorporated include flexible displays, sensors, MP3 players integrated in clothing, or RFID chips printed onto packaging. In terms of applications, Japan, Korea, and Taiwan will surely play a pioneering role. Therefore, especially in these countries our market experts have to discuss such future topics more with our customers beyond daily business.
ALTANA has an excellent starting position for all important future growth fields, including information and communications technologies, consumer goods that improve the quality of life, safety technologies, mobility / transport, energy, influencing the climate, alternative raw material sources, environmental protection, and conserving resources. As a result, we are very confident that in the future innovations will continue to make a significant contribution to the growth of our company.
Open Innovation at ALTANA
ALTANA is a member of several Innovation Networks.