On Track and Ready for Growth
With a Technologically Driven Approach WeylChem Focuses on Attractive Market Areas
WeylChem is one of three major platforms in the portfolio of the International Chemical Investors Group (ICIG). With its non-GMP Fine Chemicals and Custom Manufacturing businesses and annual sales of more than €650 million, the company is also one of the cornerstones of ICIG’s strategy: “We have reached a size where we can be called the market leader in custom manufacturing for various industries,” says Dr. Frank Wegener, who joined ICIG as President of the WeylChem Group of Companies on January 1, 2015. Dr. Michael Reubold met with Frank Wegener in his Frankfurt-Fechenheim office to learn about the future strategy for the company.
CHEManager: Dr. Wegener, what is the role of WeylChem within the ICIG portfolio?
F. Wegener: ICIG continues to look for businesses which are no longer core business to bigger chemical or pharmaceutical companies. The businesses should add value, i.e. by offering synergies with existing parts or should offer the creation of value in another way. Insofar, WeylChem fits exactly to that template.
How do you translate the ICIG strategy to your strategic plans?
F. Wegener: WeylChem continues to harvest synergies between existing operations allowing us to enhance the business profitability, thus improving our ability to invest into new technologies which form the main basis for the custom manufacturing business. Remember that most of our businesses have been out of the strategic focus with their previous owners for some time, both in terms of attention as well as with regard to the ability to invest substantially. We needed to restructure most of these businesses and created a new perspective for them. This is an important aspect of all businesses owned by ICIG.
What defines the company’s standing within the ICIG and the markets you serve?
F. Wegener: Our customers value our ability to offer most of the technologies they need to get their complex molecules manufactured by a sizable partner in Western Europe or in North America.
Our commitment to exclusive custom synthesis and our state-of-the-art assets give our customer a stable and reliable supply position. Our size and our competences give us the opportunity to capture synergies between our nine operating group companies and allow us to implement efficient and reliable processes. After having completed the last two acquisitions, Allessa and the Detergents & Intermediates business from Clariant, we have made major steps to restructure our businesses and to establish a new structure. With other words: we are on track with our plans and ready for growth, organically or by acquisitions.
WeylChem is in the meantime the leading provider of custom manufacturing service e.g. to customers in the agrochemicals industry. We are known for our full range of technical capabilities – from the synthesis of a new molecule in the lab to the fast realization of a production on an industrial scale. With the size we have reached and with our portfolio of group companies having various strengths, we are able to optimize value chains and realize growth in attractive markets. Insofar, our strategy in WeylChem is well aligned with ICIG’s targets and fits well to the long-term holding intention of our owners.
We are developing ourselves towards becoming a leading value creator in the fine chemicals industry which will enable our customers and us to achieve more.
In which markets do you see growth potential for WeylChem?
F. Wegener: One of our main focuses is the agrochemical industry. That hasn’t changed. However, during that last two years, the industry is experiencing a difficult cycle which affects us as well. About one third of our sales are realized in that industry, the bottom of the cycle is expected in 2016. We will not drop the attention to that industry but we have built up a significant business in other industries.
Since the last acquisition early 2014 we have a footprint in the detergent industry with bleach boosters, surfactants, catalysts and other functional detergent ingredients. This business accounts for about 30% of our overall revenues. We always supplied products and services to various other industries such as personal care, plastics, and catalysts, only to mention some examples. We have recently reviewed our strengths in these segments and came to the conclusion that our offering can contribute value to customers in these industries.
Which new markets do you want to enter and how?
F. Wegener: There are some attractive markets which we did not serve with a very focused approach in the past. The agrochemicals custom manufacturing activities have been in the center of our activities for many years. However, also in the past, WeylChem group companies have been known for the competence in pigments manufacturing, for high performance offerings in the electronic industry, in custom manufacturing for water treatment and oilfield chemicals, just to mention some areas. Our approach has been strongly technologically driven which we want to keep as a core competence.
We will now enter more deeply into the areas with an attractive growth potential and a good match with our capabilities. We want to understand more deeply how we can make our customers more successful by adapting more efficiently to their needs. In order to do that, we need to intensify the dialogue with our customers and customer customers.
What investments will you make to realize this growth strategy?
F. Wegener: If you look at our strategy WeylChem 2020, we anticipate gaining significant momentum by applying best operational industry practices and thus realizing excellence. Our group companies have been coming together with a high pace and have various cultural and organizational backgrounds. Introducing methods to work efficiently together releases energy and funds which are available for investments into growth. That’s one of the main sources we will use to develop our network of production assets. We have already made major steps into that direction. With some of our technologies, we are “the last man standing” in Europe, which we see as an asset for our customers and a positive challenge for us.
Furthermore, we continue to invest into the education of our Sales organization. Most of our sales people have an academic degree in chemistry or a related technical discipline. That’s a strength we want to keep, at the same time we are planning to expand our sales force and will enable our people to understand our customer needs better. We see that as one of our most important investments into the future.
You are planning a relaunch of WeylChem. Can you share some details on it?
F. Wegener: We have more than doubled our size during the last 2 years. With the recent acquisitions, we have also broadened our offer in terms of the relevant markets as well as technology wise. WeylChem has gained importance for new and existing customer – we want to make sure that our new setup and our brand promises get the right attention.
We have also recently made changes in the way we are organized. The new organization reflects the principle of striving to keep the entrepreneurial spirit of self-standing group companies combined with the ability to use group synergies. We think that this fosters innovation which we need in order to cope with the increasing demands of our customers.
Additionally we will apply changes in the way we set priorities and present ourselves. Our technologies will always be of utmost importance; that will not change. However, we want to attract the best people from an industry which is known to be somewhat conservative. We see that as a challenge which we are ready to take.