“Chemistry” in the Specialty Chemicals Industry

“Chemistry” in the Specialty Chemicals Industry
ACS Regional Meeting
October 21st, 2010
David Mielke (CEO & President) and Joel Salzman (Director)
ChemDesign Products
1

Introduction(s)
Steve Hurley and Mark Klemp
ACS
ChemDesign Team

Overview -
The Chemical Industry
The Specialties Chemical Industry
Players, Markets, Challenges
The Future of Domestic Chemistry
ChemDesign’s Niche and History
Role of Chemists
Key Attributes of Successful Chemists

The Chemical Industry
Basic Chemicals
Commodities
Feed Stocks: Oil, Nat Gas, Pet Gas, Ore, Bi-products
End Products : Plastics, Monomers, Inorganics, Rubber, Solvents, Fertilizers
Markets
Textiles, Plastics, petroleum, Paper, Metals, Other
Specialty Chemicals – Fine Chemicals, Adhesives, Coatings, Additives, etc
Life Sciences – Pharmaceuticals/Healthcare
Consumer products – Cosmetics, detergents, Soaps

Major Players
BASF (Germany)
Dow Chemical (USA – Michigan)
INEOS (UK)
LyondellBasell (USA – Texas)
DuPont (USA)
Bayer Ag (Germany)
Mitsubishi (Japan)

Economic Trends
The industry is growing worldwide
Imports and Exports are Balanced (Based on 2008 data)
Decline in Pharma and Organics
Increase in Plastics, Detergents, Dyes, other.
Asian Dominance (Exports from China are substantially exceeding imports to China)
Flexibility, adaptation, innovation, value added are key to future growth in the United States and Europe.
Petroleum …Green Shift

What is the Specialty Chemicals Market
Represents Approximately $100 billion of a $3 Trillion Market
Encompasses:
Fine Chemicals, Coatings, Additives, Electronics, Catalysts, Oil Additives, Water treatment, Cosmetics, Flavors & Fragrances, and Adhesives
Target molecules at Volumes of 1000 to Multi-million pounds
Value of $0.30/lb to $200/lb processing Fees
Tend be key ingredients that affect properties of commodity products (Value Added)

Challenges to Chemists:
Specialty Chemicals is “Not for the faint of heart”
Dynamic business, Intense Competition, Daily opportunities to improve and reduce costs.
Offshore shift to India and Asia
Tempered to commodities, dirty chemistry, dyes, and pharma
Innovation equals success
Always Create Value for your customer
Inventory management, delivery, reach-ability
Be an extension of your customer, allow your customer to sleep at night!
Give them back a better process than they provide
Maintain a safe, environmentally sound, manufacturing platform
Move ahead of the Transition…Lead versus Follow

Growing Chemical Markets for the Future

The World is Changing:
Alternatives to Petroleum
Energy and Feed-stocks
Chemists will solve these challenges
Storage of Power
Organo-metallic
Bio-based Commodities
Domestic due to costs and resources
Fermentation chemistry, biochemistry, carbohydrate chemistry
Human cells conduct complex chemical reactions….
Clean Agricultural compounds
Functionalized proteins – non-toxic to humans, short field life.
High Actives – low volumes

What is ChemDesign’s Role?
A Resource for Custom manufacturing of Specialty Chemicals
Make a molecule without external technology (Chemists)
Transfer external technology and optimize (Chemists)
Run as is (Chemists – evaluate, translate)
High Degree of Customer Interaction with Chemists
Provide value and capability
An extension of a customers capabilities in the product life cycle
Development quantities through test markets (Lab to Plant)
Surge capacity, temporary production needs
Mature products that were pushed out to free up capacity
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Unique
Capabilities
andFlexibility
Highly Experienced
Staff
Intellectual Property Preservation
ISO 9001:2008 Registered
EHS Stewardship
Competitive Manufacturing Platform
Confidentiality
Well Maintained Operating
Facility
Why do Customers Choose ChemDesign?
ChemDesign enjoys an unparalleled reputation in the industry based on a strong value proposition that enables customers to confidently outsource the development and production of critical, non-core products.
12

CompanyHistory
ChemDesign is founded through the purchase of Ansul Security Chemicals’ Marinette, WI operations by a group of individual investors.
Bayer acquires ChemDesign and integrates the Company with its Industrial Chemicals Division.
ChemDesign achieves profitability.
H.I.G. leads the acquisition of ChemDesign from Bayer.
ChemDesign Products is Formed
2001
2005
2006
1983
1985
1994
SpecialtyChem “breaks” from ChemDesign Fitchburg
ChemDesign operates primarily as a captive supplier to Bayer.
ChemDesign replaces $16 million of legacy Bayer business with higher margin custom and proprietary product sales.
ChemDesign constructs a greenfield plant in Fitchburg, MA.
Bayer invests $140 million in capital expenditures in the business.
ChemDesign: A Legacy of Leadership in the Specialty Chemical Industry
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Specialized Organic Chemistries
• Alkylation • Chlorination • Etherification • Oxidation
• Amination • Diazotization • Friedel-Crafts • Polymerization
• Bromination • Esterification • Hydrogenation • Sulfonation
Production Capabilities
Approximately 70,000 Gallons of Reactor Capacity
45 Reactors (300 to 6000 gallon scale)
Rated Class 1, Div 2, Group C&D Environments
Distillation and solvent recovery up to 30 stages and full vacuum
Solid and liquid isolation capabilities
Atmospheric & Full Vacuum Dryer Capabilities
Operating temperatures from 0 to 550 F, Pressures to 300 psig
2000 gal Hydrogenation capability in G/L and Hast C
Flexible assets for heating, cooling, solvent exchange, and mixing
Synthetic Minor Air Permit
FIFRA Registered
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ChemDesign serves a broad base of niche markets
Agricultural products
Fine chemicals
Media coatings
Specialty surfactants
Polymer additives
Specialty performance polymers
15

The Chemist Role
Evaluate Chemistry – Development versus research
Literature, Lab Evaluation, Technical review
Evaluate Safety and Environment
Toxicity of reagents, potential side reactions, understand kinetics
Analytical Analysis, Quality, Yield
Raw material quality, Reaction Progress, Final Material Specifications
Liaison With Customers
Technical Advisor for Technicians and Fine Chemical Operators
Problem solver and Trouble Shooter
Optimizer

Chemist Attributes
Education background
PHD, BS, MS
Work Experience while in school, Side Jobs, Hobbies, Memberships
Minor, Undergrad Work
Work History
Frequency of job transitions
Field of expertise
Examples of Value creation, Leadership, Ownership
Specific Experiences
Interpersonal Skills
Teams, lead vs. follow, technical documentation
Understanding of Value, Business Sense, Business savvy

What makes a great Chemist?
Insight (ability to pull together a team)
Think on your feet
Business Knowledge (ability to ask questions)
Offer solutions (Brainstorming)
Fix, improve, better instruction- understanding. Have facts and be concise. Define what's really important.
Follow through
Observe, document, test, understand, define, map, teach/train
Dedication and self direction

Your Future as a Chemist
Where do I wish to live?
What Industry should I apply for?
What discipline would I enjoy?
What skill set do I need for that industry?
What is my goal as a chemist?
Choose your path: QA/QC, R&D, Manufacturing, Commodities, Pharma, Environmental, Invention, Discovery, Academia.
You know you’re a chemist when spell check has no idea what words you are using!

Advice
Balance what you enjoy and what’s needed to make a living.
Pick your interests early and keep them broad, after 15 years in a field its difficult to move (too specialized)
Understand the company and its future
Understand your role in that future
Understand the culture
Do your research and never stop asking questions
Gut feel is a strong indicator
Don’t get lost in the details….

Questions?
“The most beautiful thing we can experience is the mysterious. It is the source of all true art and all science. He to whom this emotion is a stranger, who can no longer pause to wonder and stand rapt in awe, is as good as dead: his eyes are closed.”
Albert Einstein -

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“Chemistry” in the Specialty Chemicals Industry

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“Chemistry” in the Specialty Chemicals Industry — Presentation Transcript