Chirumbole 2005
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    Chirumbole 2005 Chirumbole 2005 Presentation Transcript

    • Leveraging Core Competencies to Generate New Revenues Jim Chirumbole Commercial Director, Environmental Technologies CDMA 2005 Fall MeetingSeptember 29, 2005
    • Who is Engelhard• World’s leading surface and materials science company• A global, Fortune 500 company• $4.2 billion revenue in 2004• Over 7,000 employees
    • We Start Small….. Materials science Core competencies Surface chemistryKaolin Size Thermal stability PlatinumAlumina Shape Acidity PalladiumSilica Hardness Charge RhodiumMica Porosity Transparency CobaltZeolites Pore size Activity Nickel Hydrophobicity Gloss Titanium Pigments Catalysts Engineered materials Specialized chemical Adsorbents formulations Additives etc… Automotive ● Petrochemical ● Agriculture ● Oil Refining ● Fine Chemicals ● Paper Plastics ● Cosmetics ● Air Quality ●Construction● Packaging Coatings
    • Delivering Technology to A Wide Range of Customers•We work with the leading companies in a wide range of industries and markets.•Many of these customers are served by more than one Engelhard technology.
    • And Operate as a Seamlessly Integrated Enterprise… Appearance & Performance Technologies  Process Technologies – Effect pigments – Chemical catalysts – Color pigments – Petroleum catalysts – Specialty effect films – Polyolefin catalysts – Personal care materials – Performance minerals  Materials Services Group – Metals management services for Engelhard and customers Environmental Technologies – Automotive emission systems  Ventures – Emission and performance systems – New business development – Engineered materials and systems – Separation systems
    • Creating Profitable New Revenue Streams• To sustain growth, need: – Extensions: new products to existing customers And – Expansions: New Markets - beyond current products & customers• Ideas.…Action….Execution Goal: quickly kill or move ideas to actionable plans
    • EC Strategy – “Knowing Who You Are”• Core competencies in surface and materials science• Leveraged by a strategic focus: technology based, market driven• Enabled by ingenuity• Enhanced by a passion for productivity• Managed as a seamlessly integrated, decentralized enterprise
    • Driving Growth…Finding Adjacencies
    • Strategic Direction for Growth Broad market/technology platforms: beyond core businesses Personal Care Nanomaterials for Energy-Related Materials Specific Markets Materials Senior management commitment Not “or” Both! Properly Resourced Structure/Staffing – Sponsor – Full time project leader (strong business development skills) with multi-functional team – Steering/advisory group
    • Growth Platform Opportunity Criteria• Key Attributes – Surface and materials science based – Fit with EC’s current technology base – Strong product differentiation• Achieving… – “Specialty” Margins – High income growth potential (10% + per annum)• Other Factors – Relatively short (1 to 3 years) time to market horizon – Little cyclicality and long product life cycles
    • Managing the Growth Process Stage 2 Preliminary Assessment Stage 3 In-depth Photovoltaic Ink Analysis Energy Stage 4 Stage 5 Opportunity Market Validation & Stage 1 - Idea generation and framing Development Commercialization Fuel Cells Personal Care Aseptrol® - Molecular Gate® Life Sciences Battery Materials Kaolin PremAir® Skin Care Processing Stationary Future Growth Markets Laser mkg. Aseptrol® Water4 LLDPE additives Paper Catalyst Pigments ARM Perovskite Hydrocarbon Arsenic Supports Trap Nano- Chromatography technology Bio Seps Alkane Oxidation Business High Silica Units Zeolites
    • Managing the Growth Process Stage 2 Preliminary Assessment Stage 3 In-depth Energy Photovoltaic Ink Analysis Stage 4 Stage 5 Opportunity Market Validation & Stage 1 - Idea generation and framing Development Commercialization Personal Fuel Cells Care Aseptrol® - Molecular Gate® Life Sciences Kaolin BatteryMaterials Skin Care Processing PremAir® Future Growth Stationary Markets Laser mkg. Aseptrol® Water4 LLDPE additives Paper Catalyst Pigments ARM Perovskite Hydrocarbon Arsenic Supports Trap Nano- Chromatography technology Bio Seps Alkane Oxidation Business High Silica Units Zeolites
    • Personal Care Materials• $100 Million Challenge from Senior Management• Existing Cosmetic Effect Pigment Business• Engelhard Strategic Context• Actions Steps: 1) Assign full-time staff (marketing, business development) 2) Charter a market attack team
    • Overall Market Attack Team Schedule 4-6 wks 2-3 months Phase 1 Phase 2 Phase 3 Phase 4 Preparations 1st Deep Dive 2nd Deep Dive Business Plan • Assign core team Understand market trends and unmet members needs • Market studies Business concept and plan development • Select segments to • Interview lead research users and • Fill in knowledge • Review with senior customers gaps management • Industry experts/ consultantsCharter Team Kickoff Bus Concept Workshop Decision Meeting Challenge
    • Market Attack Teams Don’t Replace Stage Gate Process Front End of Innovation New Product Development Stage MarketAttack Teams Commercialization Traditional Stage Gate
    • Personal Care Market Attack Team• Business Plan: – Confirmed attractiveness of the market – Defined where Engelhard should play – Entry strategy• Strategic Objective: Create a market and technology position in the performance skin care market via acquisition: – exploit the demographics of an aging global population. – target market segments: anti-aging active ingredients and delivery systems.• Execution: hired a full time business development professional with industry experience to execute: – list of potential targets – proactive M&A16
    • Personal Care Project Status• EC Strategy Well Received By The Marketplace – Building on Material and Surface Science Skills and Cosmetic Market Channel• Two Acquisitions Successfully Completed in 18 months – Collaborative Group (US-based) – Colectica, S.A. (Europe-based)• Revenue Growth Achieved – Gained leading market position in 18 months
    • Personal Care Materials “Stepping Stones” Inorganic Performance P.C. Skin Care Products Products Inc.Product Type e orativ EC Collab bs Effect La Pigments EC Surface Science Coletica Color Cosmetic Formulator Skin Care Formulator Proprietary Formulations
    • Energy Related Materials• Growth challenge from senior management• Engelhard plays in the energy value chain – FCC catalysts (oil refining) – NG purification – Syngas – Fuel Additives – Fuel CellsAction Steps: 1. Full time business development person to lead the effort 2. Cross-functional team
    • Team Workflow & Process Workflow ResourcesPhase 1 Define Market Matrix • Market Studies Prelim • Industry Experts/ConsultantPhase 2 Screen Prioritized segments • External Interviews Data gathering & analysis • Industry Experts/Consultant • Personal Networks • Market StudiesPhase 3 Review & Gap fillingPhase 4 Strategy Challenge Workshops • Growth counsel & team Business Plan & RoadmapPhase 5 Implementation • Assign Business Leader & Owner
    • Attractive Opportunities Along Entire Energy Value Chain Source & Conversion, Efficiency & Supply Storage & Use Conservation• Gas Economy • Energy Conversion Coatings & Films • Natural gas production • Clean fuels (GTL) • Thermal barrier materials and • E&P materials • Fuel Additives technologies • Natural gas treating • Energy Storage • IR/UV barrier • Batteries Technology & materials and Manufacturing Linkage technologies• Alternative Energy • Wind Power • Super-capacitors • Gas absorption & • Solar storage • Photovoltaic • Thermal management • Distributed Power • Fuel Cells • Bio Derived Fuels & chemicals • Hydrogen Economy Infrastructure
    • Screening ParametersInformation Developed1 Market size $ (material market & application market) (<$100, 100-$500, $500+)2 Market growth rates (0-3%, 3-7%, 7+%)3 EC Competency Fit (L, M, H) Market concentration (top 3 >60% mkt share, top 3 have 40-60% mkt share, top 34 <40% mkt share)5 Value add opportunity? (L, M, H)6 List of value add materials7 3-5 names of material supply companies Technology Maturity (L = product lifecycle <1yrs, M=product lifecycle 1-5yrs,8 H=product lifecycle >5+)
    • Battery Materials HypothesisMarket Attractiveness Team Ranking Opportunity Size: $900M (excludes Pb/acid) Market Size 3 Market Growth: 7-8% Growth Rate 3 Industry Concentration: Low/High Technology: Cathode materials, separator Engelhard Fit 1 materials, electrolyte materials Overall 7Strategic Options Engelhard Fit – Acquire Lithium platform – Familiar manufacturing (cathode materials) – Acquire separator/membrane platform – Diverse market applications (Li platform) – Partner with battery supplier and – Tracks automotive industry evolution manufacture active cathode/electrolyte – Pharma, polymer, catalyst markets materials – Synergies with thin films and fuel cell capabilities – Global asset management
    • Data Gathering & Analysis• Sub-team formed – Primary and Secondary Market Research• Identified: – Products – Customers Needs• Validated FitBusiness Plan Developed
    • Battery Materials Opportunity• Strategic Intent – Position Engelhard as leading supplier of advanced cathode materials for high-power rechargeable lithium-ion batteries – Leverage EC custom manufacturing capabilities to enter market and acquire key emerging technologies to build a sustainable growth oriented business High Drain Applications • Aerospace/military • HEVs and EVs • Backup power • Power tools
    • Battery Materials Program Status• Identified Partners and Licensing Opportunities• Qualify Materials with Customers• Commercial Products• Forecast significant revenue in ‘06
    • PremAir Ozone Distruction Technology Leveraging existing technology for new market needs  Coatings applied to heat exchangers  Family of technologies that destroy pollution in ambient air  Takes advantage of massive air movement & breakthrough catalyst technologiesYou may already have heard of PremAir from press reportsIt is basically a coating, much like a paint, that can be applied to heat exchangers such as car radiators. As air passes through the radiator, thepollution in the air is converted to harmless materials.The elegance of the technology is that the radiator and the fan that pulls air over the radiator are already part of the car, so the technology is verycost effective.
    • PremAir® Coated InsertsSharper Image Air conditioners
    • Building a Niche Business• Offer cost effective Ozone Destruction inserts• Potential to fit a variety of applications• Multi-million $ business on ‘06
    • Conclusions and Recommendations• “Know who you are” – Senior Management Direction• Look for Adjacencies – Technology/Market Channel• Assign full-time people• Consultants with domain expertise – Market knowledge/access• Set aggressive time lines• Use tools that fit your company culture