By: Frank Esposito
November 26, 2013
Even as it marks its 85th birthday, A. Schulman Inc. isn't limiting its directions for future growth.
"We started with rubber and moved into thermoplastics — but we could do more," Bernard Rzepka, chief operating officer and executive vice president, said in an interview at K 2013 in Düsseldorf, Germany. "We want another 85 years at least. We're in a situation where we're not just plastics — we're a materials company. It's really a different approach."
Rzepka's comments are enlightening in the context of a year in which Fairlawn, Ohio-based Schulman — a major North American compounder and a leading compounder and resin distributor in Europe — attempted to buy Ferro Corp.
Mayfield Heights, Ohio-based Ferro has plastics compounding and additives units, but generates more than half of its sales from non-plastic products. Ferro's board turned down Schulman's purchase offer of almost $600 million.
In its fiscal 2013, ended Aug. 31, Schulman was successful in two purchases — paying a total of about $100 million for compounding/distribution firms Network Polymers Inc. of Akron, Ohio, and Perrite Group of Warrington, England. Network and Perrite have combined annual sales of almost $200 million. Schulman now has made eight acquisitions in the last four years.
"We're looking wider, but we'll continue to focus on plastics," Rzepka said. "The point with acquisitions is that we have a long wish list of what we'd like to buy, but someone has to be willing to sell. You have to have a long-term strategy and luck also. We'll continue to pursue and follow up on businesses if they're in growing niches and fit with our strategy."
At K 2013, customers were looking for lightweight materials and ways to reduce waste, according to Heinrich Lingnau, Schulman's vice president and general manager for Europe, the Middle East and Asia.
Lingnau said materials with post-consumer recycled content "are still one of the growth areas" for Schulman. Those materials are "an economical and ecological solution" for customers, he added.
As a sign of Schulman's success in supplying engineering resin compounds to the automotive market, Lingnau noted that the firm won a Global Supplier Award from auto-parts leader Robert Bosch GmbH for 2011-12.
The award, given every two years, recognizes companies that have performed exceptionally well in manufacturing and supplying products or services to Bosch over the previous two years. It's based on criteria such as quality, pricing, reliability, technology and continuous improvement. Schulman supplies materials to Bosch for a variety of industrial, automotive and consumer-goods applications, including connectors, housings and sensors.
Schulman also is seeing recent success with its powder products in applications with adhesives and powder coatings — including those that stick to metal in appliances — as well as with its functional masterbatch concentrates, which Lingnau said can boost production for plastic film lines.
In fiscal 2013, Schulman posted sales of just over $2.1 billion, up 3 percent vs. fiscal 2012.
The company employs 3,300 and operates 34 production plants globally.