Saint-Gobain’s policy of acquisitions in the abrasives segment has brought it world leadership in this specialty*, with world- wide coverage for many product lines. The Abrasives Division was built from Norton in the US (bonded and coated abra- sives, acquired in 1990) and Europe-based companies Winter (superabrasives, 1996), Unicorn (superabrasives, 1997) and Flexovit (thin grinding wheels, Europe, 1998). The Division’s unparalleled product portfolio makes it the only supplier capa- ble of offering customers a comprehensive range of finishing system solutions, from roughing and surface finishing through to polishing, cutting and precision grinding. Its exten- sive experience enables it to provide solutions for each stage in the process in terms of both products and technical know- how. To stand firm against competitive pressure, the division emphasizes service, local joint development initiatives, new product releases, and industrial streamlining.
The Abrasives Division’s main product lines are:
●Grinding wheels, incorporating natural or synthetic abrasives
bonded with a vitrified or organic binder. Their size can vary from the miniature wheels used by lapidaries through to
12-tonne wheels for wood pulping in the paper industry. Most of the products in this business segment are made to measure.
●Thin grinding wheels, in the form of disc-shaped bonded
abrasives reinforced with fiberglass mesh. These products are standardized, and their production is the most heavily automated. End-use markets include building and home improvement and industrial applications.
●Coated abrasives, made of abrasive granules bonded onto
a paper, cloth or synthetic backing. This material, on reels, is then cut into strips, discs, rolls or sheets for use in a wide range of applications such as polishing reactor turbine rotor blades or in surface finishing for industry and the home. Coated abrasives range in size from pads a couple of millime- ters in diameter up to sheets several meters wide.
●Superabrasive grinding wheels and tools, combining a grinding
surface made from diamond or cubic boron nitride with a resin or metal bonding system. Their performance in demanding, high-precision grinding jobs and their long-lasting reliability make them indispensable for a wide array of sectors, such as auto manufacturing and aeronautics, as well as construction. In certain electronics applications, they can approach nanome- ter-level precision. Superabrasives are used in most industries (automotive, aerospace, etc.), and in the construction sector. The division’s net sales in 2005 were up by 1.9% on 2004, based on a comparable Group structure and constant exchange rates. The Abrasives Division pushed ahead with its strategy of differentiation through service, innovation, and development in emerging countries. Sales of abrasive products, highly dependent on industrial production levels in different geographical regions, rose sharply in emerging countries, steadied off in Western Europe, and edged up in North America, with new product releases and industrial streamlining compensating for difficulties in the local automotive industry. Plant investments were balanced between emerging countries (with capacity increases and local product range extensions) and industrialized regions (with the streamlining of production systems, in addition to automation and quality enhancements).
Outlook for 2006
The High-Performance Materials Sector will be carrying through its 2005 priorities into 2006: increased R&D effort, development in emerging countries, and portfolio optimiza- tion. Specifically, it plans to increase R&D expenditure by 10%, expand its production system to include six new plants in emerging countries, and selectively seize acquisition and dis- posal opportunities.
For 2006, the High-Performance Materials Sector will be seeking to balance out volume- and price-driven growth. In addition, higher energy and raw materials costs should be offset by higher product prices, technical enhancements and productivity gains. Coated abrasives are made by bonding natural or synthetic abrasive
particles onto a flexible backing, which can be cut into different shapes (belts, discs, sheets) for use in a wide range of surface treatment and polishing applications, on markets ranging from home renovation to the metal working industry.
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Research
Innovation lies at the heart of Saint-Gobain’s competitive advantage, and the Group’s structure is currently geared towards embedding R&D even more deeply within its busi- nesses. This model actively promotes development partner- ships with customers, giving the Group the very best strategic exposure for product launches. In 2005, efforts focused on gen- erating synergies between the technological specialties, increasing the Group’s presence in Asia and providing a general push to speed up time-to-market for development projects. While maintaining its level of performance on innovative local products, Saint-Gobain is developing breakthrough projects
based on its own technology, but catering to brand new markets.
The year was marked by the appointment of a new President of Group Research & Development, and a significant increase in the overall research budget, which now stands at€330 mil- lion. This corresponds to an increase in the number of researchers at our R&D centers of around 10%. Over 260 patents were registered in the year, compared to 233 in 2004. The new Shanghai Research Center team was assembled, and construction work began on the site building. Its inauguration is slated for end-2006.
Saint-Gobain Recherche (SGR) All Flat Glass
and Building Distribution divisions Aubervilliers (France) European Research and Engineering Center (CREE) Ceramics Cavaillon (France) Centre de Développement Industriel Flat Glass Thourotte (France) Centre Recherche/Développement (CRIR) Insulation Rantigny (France) Vetrotex R&D Center Reinforcements Chambéry (France) Process & Product Development Pipe Pont-à-Mousson (France) Chalon Technical Center Packaging Chalon-sur-Saône (France) Sekurit Saint-Gobain (ZAF) Flat Glass Herzogenrath (Germany) Centro de Investigacion y Desarrollo Flat Glass Avilés (Spain)
Northboro R&D Center Ceramics, Plastics and Abrasives Northboro (US) R&D Center Abrasives Worcester (US) Solon Development Center Crystals and Detectors Solon (US) Technology Center Insulation/Building Distribution Blue Bell (US) Wichita Falls Development Center Reinforcements Wichita Falls (US) SGR Shanghai All divisions Shanghai (China)
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The year also saw the rollout of the new innovation portfolio management application. This will provide project manage- ment tools covering a large portion of the Group’s R&D activi- ties, enabling projects to be assessed based on both
risk/opportunity criteria and the anticipated return on invest- ment. This analysis will give the R&D teams a clearer view of how to ensure a continual supply of projects to the portfolio, and help define the priority projects that should be backed. Since a certain number of technology breakthrough projects designed for new markets have come to fruition, brand new products have entered the market, notably:
●The "particulate filters for diesel engines" project, which saw the first filters leave the production line in January 2006. The core R&D project will nonetheless continue, as it can be used to improve the products and meet new customer targets. ●The light-diffusing glass for flat screen LCD displays has also entered the production phase, and the product is now avail- able in the market under the Smoothlite banner.
●The TOP project for ultra-light cast-iron pipes is set to bolster the Group’s positioning on the drinking water supply market, by offering a range of narrow gauge pipes and accessories suited to this market. They will compete on the plastic pipes market, since they are very light and easy to handle but retain all the durability and resistance qualities associated with cast iron.
●The Ultimate project is also coming to maturity, offering a range of especially temperature-resistant insulating products.
They will compete on the market with rock-wool based prod- ucts, but are also light enough for high-specification niche markets such as marine applications.
The targets for 2006 bear testimony to the growing ambition of our technology breakthrough projects. Together with increased investment spend, they are a potent symbol of the Group’s determination to penetrate new markets. A concerted effort will be made to ensure a constant supply of innovative ideas for the project portfolio. In addition, by focusing more on the academic world and the brightest young researchers, the Group hopes to bring fresh thinking to the upstream process and enhance its support from outside sources. The Group’s research partnership model will also be boosted by targeting other major industrial companies with a view to pursuing jointly-led projects. Finally, the completion of the Research and Development Centre project in Shanghai will prove to be a key first stage in expanding operations in emerging markets. New procedures that have been implemented to identify and recruit top-level researchers from across the globe will also receive particular attention, taking into account the growing needs in terms of personnel in Saint-Gobain’s various R&D centers. Finally, the Group is aiming to exploit R&D synergies with the recently-acquired Gypsum Division, ensuring that efforts in the field of innovation serve its organic development strategy to best effect.