Driving Sustainable Innovation in Coatings with Dr Robert Roop

Russ Fordyce 🏆 (00:01.474) Welcome back to the winner's circle. I'm here with Robert Roop from Axalta They are a big innovation award winner and we are here to talk about coatings and manufacturing of coatings and sustainability and everything going on at Axalta So Robert, congratulations on the win and welcome to the winner's circle. Robert Roop (00:17.775) Thank you, Russ. Really excited to be here today and looking forward to our discussion. Russ Fordyce 🏆 (00:22.927) So why don't you give us a look, kind of that high level overview of Axalta and kind of your role inside of the organization just to kind of set the stage for our conversation. Robert Roop (00:31.523) Okay. So Axalta is a global leader in the coatings industry. We have wide marketplaces that we serve and touch and refinish or automotive repair, light vehicle, commercial vehicle, and various industrial applications. So we're really in the business of high performance coatings to make things look really nice or, certainly make them extend their life from a corrosion and durability standpoint. So we've been in business for quite a long time, maybe a little over 150 years now and working, I think we're known quite broadly in the industry as an innovative leader in encodings. And we push the boundaries on performance and aesthetics. And yeah, I think that's where Exalt plays in the world. Russ Fordyce 🏆 (01:23.234) Well, I'm glad we have the CTO on because I have a bunch of nerdy questions to ask. I think a lot of people hear coatings and they think of paint. And the reality is I know it's far more complex than that. I have some experience with some other people with coatings and finishes and stuff. And it is super complex. How do you explain the importance of coating technology to somebody who's outside of the industry? Robert Roop (01:49.969) So I think if you're an average person in the world around us, you don't know much about paint or coatings per se, but you know, you see it every day, everything. You look around, any room you're in, you'll see coatings on most of the surfaces. And I think people get quite used to having the visual improvement that coatings provide, of course, a nice color, a nice sparkle. And it's come. quite commonplace for things to last a lot longer than they used to, whether that's a car or a bridge or something in your home. So, durability and performance is something people, you know, if they stop and think about it, they might realize, hey, yeah, that is lasting a lot longer. Cars 10 years old these days, no problem. And that wasn't really the thing in the past. So, this is kind of where we focus on pushing the frontier in these various applications and dimensions to make the world a nicer look in place and a better performing from a corrosion and protection standpoint. Russ Fordyce 🏆 (02:50.957) And Axalta is really kind of driving innovation and you're kind of at the head of that. What is your approach to kind of moving those coatings along and driving into new spaces or new processes? How do you approach that innovation cycle? Robert Roop (03:06.609) So, for us, we're very customer-centric or maybe even broader market-centric. so, my team in particular's job is to get up every day and solve customer problems or opportunities in the world around us. And so, if you look out at our marketplaces, there's always somebody that wants it to go better, faster, stronger in some dimension. And so, this is what my team does is... understand what is those customer needs and market interest. And then we apply chemistry, material science, and all this stuff that nobody knows about in the background, and actually creating new molecules in some cases to deliver on what that need is. Somebody wants it to last longer, somebody wants it to dry faster, look different. This is what my team of chemists, engineers, scientists work on every day to deliver on these very customer-centric needs. Russ Fordyce 🏆 (04:04.385) Well, and I think you mentioned that you're kind of market focused or customer focused. You have a wide range of kind of markets. You guys are working with manufacturers. You do a lot of work with automakers. How do you stay kind of aligned, you know, so closely with kind of their real world and very changing needs? I mean, you've got, especially in automotive, you've got this very, you know, almost a bifurcation of automakers now of, you know, kind of EV and non-EV. And I imagine the needs are very different. Robert Roop (04:33.829) Yeah, mean, think we have, fortunately, we have one of the best commercial teams in the industry out there working with our customers, listening to our customers, our product management and market organizations, you know, really are in tune with what the needs really are. And they are quite diverse. And, you know, from a car to a bridge to your kitchen cabinet, they are different marketplaces for sure. In the end, a lot of common things end up shining through. And so we can leverage that commonality. Color, of course, is at the top of the list. Or more broadly, appearance. Because it could be something as... The dull floor that people like to walk on they don't like shiny floors for example So we provide a clear coat with that matte finish even cars people like matte finish these days and so These are the kinds of things that we look at and then even though we're looking at a bunch of different marketplaces Color and aesthetics is important to many of our marketplaces performance durability very common requirement other different types of performance a car you don't want to rust kitchen cabinet You don't care about rust. You don't want it to fade. You don't want to yell. You don't want to crack. So durability cuts across these. then maybe the overriding umbrella these days is sustainability. so innovation that allows us to move the needle on sustainability metrics of various kinds. think this is a big common need across people that use coatings. Russ Fordyce 🏆 (06:07.383) Well, and I think as a company, guys highlight, I think it's called no compromise sustainability. Tell us what that means in practice. Robert Roop (06:15.409) In practice, mean, I think our customers tend to want it all. I mean, they're just like us. They want to get a fantastic looking coating, make their article, whether it's a car or a bridge or piece of a building. They want to make it look nice. And so that's clearly on the top of the list. And they want it to be durable and they want all these things. And then they say, by the way, we want to be sustainable too, of course. But don't compromise on anything else. mean, they want it all. they want it, you know, so for us, it's a matter, I don't usually go into a customer and say, Hey, we can give you a really sustainable coating. doesn't wear very well, but it will be really sustainable. Usually doesn't have a, that conversation usually doesn't end well. Russ Fordyce 🏆 (06:46.391) Right. Russ Fordyce 🏆 (07:04.599) Well, I imagine when you're, some time ago when your customers started asking for that, as a company you said, okay, we've got to make this other line that's sustainable. And then over time, you kind of look at that non-sustainable line going like, what are we doing with that? Because if you solve all the problems that sustainability brings into a manufacturing process, I would imagine, I am not a expert in that, you are. I would imagine once you solve those problems, why not just be sustainable? I mean, you can go into a cost angle, I would imagine, that it might be a little bit more expensive, but corporations today are almost mandating this stuff. Robert Roop (07:45.849) Yeah, I mean, for sure, many of our industries, particularly big auto companies and so forth, are mandating it. And so I think we have tools that address the needs. And so they usually give us targets on, could be energy usage to cure, could be VOC or Volta Organic Compounds emissions. so things like waterborne coatings have been creeping into the industry. When I first started, now they're quite... prominent, you know, in the world around us, you can find typically a waterborne solution around. Powder coatings is another dimension where you can eliminate volatile organic compounds. We have low energy coatings and so you can reduce the heat required to get it to dry and cure. we have a lot of dimensions that we work on our own waste, for example, eliminating number of layers. whereas you spray three, four, five, six, seven layers of coatings on there to get the aesthetics or durability. We can do that in just a couple coats these days. And so your waste factors drop dramatically. the good news is, most of these are not in conflict. And what I mean by that is you can make it look really good appearance-wise, you can make it really perform, and then consequently... It probably has a sustainability advantage. If we drop the temperature from 140 degrees to 90 degrees Celsius that it takes to cure a car, it's a huge energy savings. So our customers like that, but it's also a huge CO2 carbon footprint reduction. you kind of get it, kind of, lot of times you get them both. you do, if you twist the molecules and create a coating that can deliver on performance and sustainability parameters. Russ Fordyce 🏆 (09:30.806) Yeah, I worked in fiber optics for a few years, and it was a similar industry of where you could keep improving that energy usage. And when you're doing something like building car parts or shooting lasers lots of times, those little minor improvements really add up to huge, huge, emissions improvements, also revenue improvements or cost improvements for the companies. Robert Roop (10:01.457) You know, revenue costs, know, energy usage is a big knob these days. You know, we have a big impact on how much energy people are that use our coatings need to use. And so, you know, that's an easy one. It's an obvious one for people to see, you know, instead of baking the coatings at a real high temperature, just like in your house, turn the thermostat down and you save a lot of money. And it's also a good thing. Russ Fordyce 🏆 (10:06.359) Yeah. Russ Fordyce 🏆 (10:23.787) Right. Put a sweater on. In fiber optics and in lasers, we were dealing with different chemical compounds for the building of our chips. What are some of the technological shifts that are allowing you guys to improve that kind of efficiency and performance at the same time? Robert Roop (10:44.945) You know a lot of the magic we deliver, that's why I keep referring to chemistry or material sciences, is around our resin or polymer systems that answer these requests of improved performance and reduced sustainability impact or improving that. And so we're quite steeped in polymer science and chemistry and we make things that maybe the average person on the street would say that's plastic. That's actually a polymer that's actually that most of your coatings these days are have that in there to give that durability improvement. And, you know, so we have some pretty skilled synthesis chemists. We're not synthesizing drugs, we're actually synthesizing something much more complicated. A resin polymer system that can do these magical things of being able to perform at lower temperatures or faster cure rates or less number of layers. so that's kind of the secret behind how we address a lot of the market needs that our customers bring forward to us. Russ Fordyce 🏆 (11:54.902) And you've talked about a lot of the sustainability improvements. Is there an example where you've seen kind of an improvement you made to the sustainability kind of performance of a product that actually gave a huge benefit to a customer? Robert Roop (12:07.173) Almost always it's it's it's amazing and they said they're not at odds with each other and so You know if you think about even a couple that of our innovation by the way, we want we won six this time That's a historical number for us. It's amazing recognition for the team and and for the company in general We really do pride ourselves in being innovative and leading the industry But if you look at almost any all of six, there's an element of, we did something to make the coding do something better for the customer, as well as make it more sustainable. Our new waterborne clear coat for our refinish business reduces VOCs by 65%. And yet the performance from a... number of layers or gloss and protection to the coating stack is actually better than the previous version. you know, it's usually, sometimes my folks get frustrated, but it's usually and, right? It's usually, we want it better and more sustainable. that's, you know, almost all of these innovations come with that element of improved performance and improved sustainability. Russ Fordyce 🏆 (13:18.591) And I mentioned it before, you guys do a ton in automotive. And there is this kind of new, not new, but growing field of electrified mobility. And you guys are getting not only into the kind of automotive EVs, but all different types of EVs as well. Tell us what role codings play that are different in the future of EVs that's different than the regular automotive. Robert Roop (13:43.697) So maybe a couple of dimensions. even regular, we call IC, or internal combustion engine vehicles these days are changing and right in front of your eyes. If you look out at a vehicle these days, there's a lot of sensors all over the vehicle. And so we provide coatings that allow those sensors to work. And then when you go to repair those, of course they have to be repairable and be able to work. so, you know, on the outside, even the outside coating of the car is changing as these automation and autonomous driving bring this more sensors and those kind of dimensions. And then, you know, beyond that, now there's a whole new world where there's a battery underneath there, there's electric motors underneath there. And we have coatings that go inside those that nobody typically see, they really provide motors that operate more efficiently. So you can have a smaller motor, which extends the range of the EV that people really want the EVs to go further. And so we provide coatings inside the motors that improve the efficiency and performance in the motors and therefore reduce the size requirement. Inside that battery, even the box of the battery, for example, you know, that battery's in a big box. We coat those boxes with even one of the new products that we just wanted, E-Pro FG, where it really provides protection around heat and flames if there's any issue. Inside the battery we have coatings that enhance the thermal conductivity. we get, you these are warm and so you've got to get the energy out and we provide coatings that allow heat to transfer more efficiently. So a lot of different new things in the EV world. Robert Roop (15:28.759) and even the stationary battery world, these big stationary battery worlds. And the AI boom these days, all these large data centers, have, one of the amazing things they got to deal with is heat. You think, that's, I mean, you think about that, but there's a lot of heat generation. And so you can put a coating on that can help. transport the heat to the outside. This is a big advantage. So yeah, new world in front of us, Russ, that we're probably just scratching the surface on right now. It's a lot of opportunities. Russ Fordyce 🏆 (15:58.99) Well, I would imagine too that safety plays a lot of a big role in these because as you mentioned, the heat is tremendous in these. I know I have a car that is not an EV, but they put a battery in instead of an alternator, which is a little wacky. But I talked to one of the mechanics working on that part of the car. And he said, we hate it because it generates so much heat. And so you're putting something, you know, you've got this kind of normal wrapper of a car and then now you're introducing this whole new heat element in a different location than it's normally been too. We put firewalls in front of hot things before. now you guys are doing it with, I imagine, coatings and firewalls, but it really goes back to that kind of safety layer that you guys are building in. Robert Roop (16:39.013) Yeah. Robert Roop (16:47.705) Yeah, you know, the performance requirements are pretty steep and that's where, you know, somebody that is capable as we are with managing high performance coatings really, you know, play a... Key role in managing the safety of these systems both the battery of course before that's got a lot of profile these days But even electric motors these data centers that the the terminals for charging your EVs These are all you got to manage all these elements that people typically don't even think about or if they look even look at one of these charging stations they don't think about all that the energy flowing through there and you have to contain it and control it and make sure it doesn't get out hand of course, so yeah coatings play a pretty pivotal role and I think We are just kind of scratching the surface and a lot of opportunities for us to continue to help solve the problems in these new worlds. Russ Fordyce 🏆 (17:36.204) Yeah, well, you mentioned the data center market. think there's this boom of AI data centers, just data centers in general. We've seen it in our business in a lot of award-winning companies. And I think some of the administration now is actually encouraging, and a lot of municipalities are actually mandating that companies have their own energy on site. They can't tap into the municipal energy anymore because they take all of it. Robert Roop (18:03.62) Yeah. Russ Fordyce 🏆 (18:04.013) And so it's really interesting, like you say, it's like energy and these coatings are going to play such a... When you have to generate your own energy and not have it produced, it's a different thing. Robert Roop (18:16.901) Yeah, if you drive by a solar farm, if you drive by a wind farm, these huge windmills, they have a big generator on top, their transformer on top, our coatings are inside, they're keeping it cool, keeping it lubricated, keeping it insulated from an electrical current standpoint. Shocks are a bad thing, nobody wants a shock. so keeping electrical isolation and insulation and thermal connectivity, all these things, coatings really allow Russ Fordyce 🏆 (18:26.88) Right. Robert Roop (18:45.803) Solar cells, same thing. So as this world expands and explodes, think coatings are going to be a big part of that journey. Russ Fordyce 🏆 (18:53.949) As you mentioned, you won six of the Innovation Awards, the big Innovation Awards, which was a historic standard. I think we'd had a three-peat in one before, and I think we've been now running it 11 years. What's really unique, I think, I find is in reading through your nominations and other nominations kind of like it, The innovation really, the winners really have kind of a common theme and that's really when you create a culture where it's not just engineers and it's not just scientists and it's not just sales or customers. It's when you're bringing that group together into some sort of community, however you're doing it, kind of hub and spoke or in a group. How are you doing that inside of Axalta and driving this innovation with all these different kind of groups? Robert Roop (19:40.485) We have a very nice connected system. I'd say, under the umbrella of one ex-Auto, we're here all to win. And so the teams work cross-functionally within each business, within each organization. So when the marketing folks, the sales folks, they hear the need, we are instantaneously communicated to, we start thinking about how we can manipulate the formulation or the components of the coding to deliver on that need. And I think that's... That connectivity and cross-functional approach to innovation, think, is why we continue to sustain this kind of a well-oiled machine that continues to drive innovation for our customers. And I think, if I look at the big awards this year, You know, it's first of all, it's humbling to be amongst a group of people that have some, you know, very diverse parts of our world from banking to IT to consumer products and certainly materials and chemicals. But, you know, I think it really does, know, our products and innovation, they're real. They're not just something we're dreaming up in a lab. I mean, they're out in the world today. That's usually a criteria that, you know, it has to be commercialized. you know, so when I say you can see a you know, E-Pro FG, you just look underneath a Tesla and you'll see this black coating on this big black box that holds the battery. That's it. It's there. You if you look out your window and see a car, that's our coatings. And some of the ones that we want to award for are probably sitting on those vehicles right this minute. So I like being recognized for real life things as opposed to academic kind of innovation, which is also important. But, you know, I think our Ours is very applied to our markets and our customers and I appreciate the BIG group recognizing those kind of things that matter to people and people can really changing people's lives. Russ Fordyce 🏆 (21:39.886) Well, luckily it's not me deciding. It's our judges. So, you know, it's a lot of experts with titles and advanced degrees, which is pretty amazing to me. As a CTO, how do you decide where to put kind of the long-term bets? I imagine you've got this, you know, you've got this innovation cycle that's probably, I don't know, 12 to 18 months, 36 months out. How do you look, you know, 48, 60 months out and say, you know, where are we going to start putting a few dollars to see where things go? Robert Roop (22:10.225) Yeah, I mean, think that's where the game becomes a little bit harder, right? So on the nearer term stuff, 18, 24, 36 months, this is usually a market or a particular customer, you know, I have already identified, hey, if you could give me a coding that would do something X, Y, Z, you know, we could really benefit from that. And so we're working on those every day. And that's big part of what we work on. do, you know, then you have to look at megatrends. We talked a lot today about electrification. That's clearly a mega trend that's going to be in the world around us, I predict, in next 10, 20, 30, 40 years. For us, some of the longer-term investment in scouting those mega trends is where we get a foothold of a little view of what might be in four or five years, six years. And how can we get ready now to be in a position to deliver solutions when they pop up at our customers or in our markets? Russ Fordyce 🏆 (23:14.037) And because you're CTO and because it's everywhere, walk us through kind of the impact AI is having on the development of these new innovations. Robert Roop (23:23.409) Yeah, I mean, think it's there already and it's ramping up. so in my little world, we've been using these tools for a good while actually to manage and understand color and our color science and how to deliver color to our customers, whether that's in an original equipment on a piece of construction equipment or a building or certainly a car. And then, you know, one of our large marketplaces is repairing your car where, you know, what the value proposition there is not to make it better, different. Those are bad words in that particular business, recreating it so you never knew it happened. And so to do that, you got to measure what the color is. There's sparkling things in there as well. And so we've been using AI to help us lead in the area of color and color reproduction. it's, Russ, it's blowing up everywhere. And these tools are making it easier for us to use them to... Aid and shortcut, you know to be able to go faster and as we develop solutions for maybe some more of minor changes that our customer needs, you it's you need to adjust the viscosity. We're having a little bit of run. Okay, this is simple. Just figure it out quickly and these tools are making that when we have the same problem, we may have the same problem in three or four or five different spots in the earth. Instead of solving it three or four or five different spots, these tools these days make it very easy to come up with a solution and zing it around the world and become much more efficient in delivering solutions to our customers. Russ Fordyce 🏆 (25:00.151) Well, an AI will have a large impact on not only your formulations and how you guys are coming up with things, but your customers' businesses are going to go through a massive retooling, especially with robotics pouring into these factories. New market's there for you, I guess, as well, right? Codings for robotic arms and everything else. Robert Roop (25:21.167) Yeah, this whole world, like I said, you say, well, how do we figure out what to work on for five years? I mean, if you wait five years, you're going to gone. You're being lost in the dust. And so these are the kind of megatrends that we look at and say, how can we get started thinking about the solutions for the problems that are going to pop up in three, five, six, seven years in these megatrend areas? And so I think that's, so we've been pretty successful over our history over the last decades that, you know, staying in the forefront of what's important to our markets, what's important to our customers and being in a position to deliver to them when they need it, as opposed to have them wait around for five years to get a solution. Russ Fordyce 🏆 (26:07.659) Yeah. Well, Robert, super interesting conversation. You never know about the world of coatings. I love digging into these things that are kind of behind the scenes that you never even know are there. So thank you for giving us that kind of primer and coatings and all the insights on kind of EVs and what's coming. Super interesting. Robert Roop (26:24.677) Yeah, pleasure Russ. really appreciate the opportunity. And again, thank the BIG organization for the recognition for not just these six particular innovations, but just for the Axalta. I'll call it the innovation machine we've worked on. And that's beyond my team. That is the whole company. Because you kind of have to bang on all the cylinders to actually come up with what's important, come up with a solution, deliver to our customers, and service them. and be successful. So thanks for the recognition and I look forward to continuing to send in some nominations in the future. Russ Fordyce 🏆 (26:58.752) Absolutely. Congratulations again. Robert Roop (27:00.497) All right, thanks.