The term TIC, which stands for testing, inspection and certification, might be unfamiliar to the general public but it represents an industry that touches the lives of everyone. Products as small as mobile phones, cosmetics and food, to those as large as buildings, ships and airplanes, all need to be tested and certified by TIC organizations. It is critical that manufacturers follow regional and global standards and regulations to ensure product quality, and ultimately to ensure environmental protection and the health and safety of end users. All of the products we use in our daily lives have passed through the TIC industry.
The Bring on the Heat (BOTH) 2019 international technical conference was held between 13-14 August in Suzhou, China. This event was organized by the National Association of Corrosion Engineers of USA (NACE International) and China National Offshore Oil Corporation (CNOOC), and co-sponsored by the National Fire Test Centre (Sichuan Fire Research Institute) of the Ministry of Emergency Management. As the supporting media partner, Ai-Tubang had the opportunity to meet with Element Materials Technology (Element), a leading global TIC provider. It was great to have an in-depth interview with Dr Jifeng Yuan, Asia Pacific Business Development Director and Global CTO of Fire & Building Products and, to gain a deeper understanding of Element and its future development plans.
A century of heritage for the world's top TIC provider
The history of Element can be traced back more than 190 years when in 1827, the in-house testing laboratory of the Dutch engineering group Stork served as the original prototype of Element. Over the next century, Stork only had about 200 employees before 2001 and developed into Element through Management Buyout (MBO) in 2010.
This relatively slow start in life is largely related to the nature of the TIC industry. Service providers work with customers in widely distributed industries across the entire supply chain, but the market can be fragmented. Many TIC companies cannot meet customer requirements in some market segmentations, which results in a large number of small and medium-size enterprises.
In order to develop competitive advantages and grasp market share, in recent years many TIC organizations have been proactive in mergers and acquisitions (M&A) to create market consolidation. According to statistics, there is an average of 20-30 M&A transactions per quarter within the TIC industry. Since 2010, the top 12 testing groups have completed more than 400 M&A transactions.
When it comes to exploring industry trends and evolving with market developments, Element is currently leading the way. Since 2000, it has carried out a number of acquisitions including that of Exova in 2017 which elevated Element to one of the top tier global TIC providers.
Today, Element has 189 laboratories and consulting offices in more than 30 countries around the world and employs more than 6,700 engaged experts. It has four strategically focused industry sectors: Aerospace, Fire & Building Products, Oil & Gas and Infrastructure and Transportation & Industrials. Element is considered the leading testing services provider for Aerospace globally, as well as regionally for the Oil & Gas and Infrastructure sectors. In addition, Element’s Transportation service offering holds a leading position in the US market, whilst the Fire & Building Products sector occupies market leading positions in Europe and Australia.
“In terms of Fire & Building Products, our business mainly includes: fire safety testing and the certification of products; management system certification; fire engineering design consulting; training; and business related to the furniture industry.” said Dr Yuan.
The main theme of the BOTH 2019 conference was ‘the application and prospect of fire protective coatings in industrial applications.’ As this aligns well with his own technical expertise, Dr Yuan discussed Element’s service offering and its future strategic plan with Ai-Tubang.
The story of Element's success
As a long-established, highly professional and globally recognized testing, inspection and certification service provider, Element's success is well-earned. Why does Element continue to be so successful? Dr Yuan's answer is simple: industry leading technical expertise and a track record of consistently delivering trusted testing results.
“From the customer's point of view, they recognise and appreciate that we add value to their business through the quality of the services we deliver. From a market perspective, reports and certificates from Element and its subsidiaries such as Warringtonfire, help gain market access. Achieving these two points is critical to our success.”
However, it is easier said than done, and it is not necessarily easy to put this principle into practice. Taking the Fire & Building Products sector as an example, Warringtonfire, which is part of the Element Group, has been involved in fire safety product testing, inspection and certification in the UK since the 1960s. After more than 50 years of operation and development, it has justifiably earned an outstanding reputation for safety, partnership, integrity and excellence, helping it to establish its position as a top tier global TIC business.
Element’s strength can be attributed to both the breadth of services it provides and the depth of its technical expertise. In the case of Fire & Building Products, the breadth of Element’s fire safety business covers not only the construction industry, but extends to the Oil & Gas, Aerospace, and sea and land transportation industry sectors as well. When it comes to the depth of technical expertise, from fire safety engineering design, and product testing and certification, to construction, on-site inspection, and final product use and maintenance, Element covers the entire supply chain ensuring quality and continuity.
Element is also proactively involved in the development of relevant test standards. In Europe, the development of national standards mostly relies on the collaboration of third-party testing companies, manufacturers and design institutes. Element has been actively participating in the formulation and development of national and international standards, as well as industry standards, for many years and today is recognised for making a major contribution in this area.
Opportunities and challenges in the Chinese market
Although undeniably already a hugely successful global business, Element continues to grow as businesses around the world recognise the contribution its technical experts can make to their success. With its breadth of services and its depth of technical expertise, as well as a local presence, Element is well placed to support businesses in China, which remains one of the fastest growing economies in the world.
"China and the wider Asia-Pacific region will play an increasingly important role in Element’s future," said Dr Yuan, who was recently appointed to the role of Asia Pacific Business Development Director.
Although historically, North America and Europe have been key strongholds for Element it is clear that there is an opportunity to establish a strong presence in the APAC region.
Dr Yuan said that the Chinese market will form an integral part of Element's future global business helping it to counter any impact from possible global economic uncertainties by 2025.
Referring to the Chinese market, Dr Yuan has confident plans. Element's existing approach has been to supply export testing and certification services to domestic enterprises as well as foreign companies in China. The next step is likely to involve cooperation with domestic fire testing authorities, specializing in testing, certification and training. He said that: “The Chinese market is huge, and opportunities and challenges coexist.”
Dr Yuan’s approach to the Chinese market is well timed as it coincides with reforms to domestic fire safety regulations. The domestic fire safety market is developing rapidly and with accelerated industrialization and urbanization, the market is set to expand quickly. Along with modernized architectural design and complex equipment design, the requirements for fire protection are becoming more strict. From this perspective, it provides the perfect opportunity for TIC providers such as Element, who through its subsidiary Warringtonfire has built a global reputation as experts in fire protection, to play a key role.
However, as a result of the sheer size of the market and the broad scope of industrial sectors, customers’ needs vary greatly and there are more than 30,000 testing providers in China at present, operating not only in the area of fire. With this rapid development of industry, regulatory supervision has not yet caught up. With the maturity of Chinese governmental regulations, it is clear that the more trusted TIC providers will start to gain market access. TIC businesses who can offer the right mix of technical capabilities and scope of services will be able to take advantage of the huge opportunity for market consolidation, particularly through greenfield development and any necessary mergers and acquisitions.
While Element’s global success is undeniable, the Chinese market is a new frontier. Dr Yuan is confident that with track record of trusted service and leading technical expertise, Element is ideally placed to establish a strong presence in China, adding value to businesses and their products within China and globally.