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Bayer's MacCleary predicts sales growth this year

By: Frank Esposito

July 26, 2012

PITTSBURGH (July 26, 1:55 p.m. ET) — In an increasingly common 21st century move, Jerry MacCleary has taken on a new job while keeping his old job.

MacCleary became president of the NAFTA region for Pittsburgh-based Bayer MaterialScience LLC on June 1. In that role, he’s replacing Greg Babe, who retired after a 32-year career with the firm.

At the same time, MacCleary retained leadership of polyurethanes marketing and business development for BMS in the NAFTA region. He’s held that responsibility since 2004.

MacCleary has more than 30 years of experience overall with BMS, which is a unit of global chemicals giant Bayer AG of Leverkusen, Germany. He’s now heading a regional business that had sales of almost $3 billion last year, up almost 10 percent from 2010.

MacCleary recently fielded some questions about the business — and what the future might hold — at his Pittsburgh office.

“We’re cautiously optimistic on the economy,” MacCleary said. “We think our sales volume in North America could end up being up 6-8 percent this year.

“Our strength has been automotive,” he added. “We didn’t expect it to recover this much for a while. Lightweighting [of auto parts] has been a big plus for polycarbonate.”

In the building and construction market, MacCleary said PU is being used as a substitute for other products. PU foam, for example, is replacing products such as fiberglass. Energy-efficient, PU-based boards also are being used in commercial roofing and in re-roofing work.

An improved U.S. housing market would be a big boost for PU sales. The market built about 610,000 units last year and through March was on pace for 650,000 in 2012. But that’s a far cry from pre-recession totals that were as high as 1.4 million as recently as 2007.

“We’re seeing some change there,” MacCleary said of the housing market. “I think the number of [annual] starts can get back to 1 million.”

And like many Pittsburgh-area businessmen, MacCleary is enthusiastic about prospects for shale gas. Shell Oil has plans to develop a major ethane cracker in Monaca, Pa., about 35 miles from Pittsburgh, that would produce numerous plastics feedstocks.

“It’s a game-changer for the U.S. chemical industry,” MacCleary said of the shale boom. “We had been seeing more competition for the same resources, and the U.S. wasn’t even on the radar screen for growth. Now, we’re going to be the low-cost manufacturer.”

“This is very positive. It’s going to make us more competitive and lead to more manufacturing.”

Sustainability also is on the agenda at BMS, with MacCleary pointing out that PU products like walls and roofing, and PC items like LED lighting, can be energy-savers as well.

“Everyone has major programs to reduce their carbon footprint,” he said. “We’ll continue to work with the American Chemistry Council on Responsible Care and other programs.”

The medical sector holds promise for BMS, according to MacCleary, not only in the form of PC being used in medical devices, but in PU being used in new medical buildings and urgent-care centers that are being built.

On the capital improvement front, BMS late this year will be closing its operations in Baytown, Texas, for a $120 million revamping that will improve the site’s safety and reliability while increasing capacity through streamlining, MacCleary said. The site’s production of PC and PU feedstocks methylene diphenyl diisocyanate and toluene diisocyanate is expected to begin again early next year.

In North America, BMS also is facing a challenge in the personnel area, as about 15 percent of the firm’s non-manufacturing employees are scheduled to retire in the next 18 months.

“We’re definitely going to be hiring,” MacCleary said. “It’s going to be a big challenge to fill those positions.”