DUSSELDORF, GERMANY — M.A. Hanna Co. made some costly missteps in trying to build its colorants and additives business too fast, but that will not deter the Cleveland-based resin compounder and distributor from its aggressive mission for global growth, said one of the firm's top officials.
The acquisitions will continue, since Hanna — already third-largest compounder by industry estimates — cannot achieve its ambitious goals otherwise, said Garth W. Henry. Henry, a 23-year Hanna veteran who has been involved with all 25 or so of the firm's plastics acquisitions, recently was promoted to executive vice president for worldwide plastics and international operations. He said Oct. 26 at the K'98 show in Dusseldorf that Hanna — whose stock price has plunged 40 percent in 1998 — plans to focus on closely linking its three main business groups globally by end markets rather than on a regional basis.
To that end, Hanna announced Nov. 4 it is integrating the engineered materials and plastic colorants businesses of its United Kingdom subsidiary, Victor International Plastics Ltd., with its European businesses. Those units now will report to Stephen Duckworth, recently named European marketing and technology director for the engineered materials business. Victor Managing Director M. Huw Radley resigned Nov. 6.
Given the harsh realities of 1998, Hanna will be hard-pressed to achieve its stated goal of $4 billion in annual sales by 2001. But Henry said: ``We haven't pulled away from our goals. We hope to get back to the same pace of growth in 1999.''
The company still is aiming to boost its percentage of international sales to 30 percent. It raised that business to 24 percent this year from 22 percent in 1997.
In a wide-ranging interview, Henry touched on various topics, including:
Which geographic regions the company is targeting for growth.
The likely role of Martin ``Skip'' Walker, who last month came out of retirement to reassume Hanna's top management spot in the wake of Douglas McGregor's abrupt resignation.
The need for further restructuring actions.
Takeover and merger rumors.
Hanna's recently announced plans to close five of its 17 North American colorants plants and lay off 260 staff by mid-1999 will address the major problems in that business unit, although Henry acknowledged the firm still must operate better. He said the company learned something from its troubled efforts to quickly build a far-reaching U.S. colorants business.
``We waited too long, then we did it too fast. We probably should have started our integration sooner,'' and then accomplish it in interim stages. In the future, Hanna is ``not going to move faster than the customer, like we did at Color,'' he said.
Though Henry believes Hanna, overall, is well-positioned in Southeast Asia, he wouldn't mind seeing a stronger presence in the colorants business there.
Another current target is the South American Mercosul trade region (covering Brazil, Argentina, Uruguay and Paraguay). ``We continue to identify and talk to candidates'' there, Henry said, though he acknowledged that he'd like to see some of Brazil's political and economic problems settle down first.
Regarding Walker's surprise return to head the firm that he spent 11 years transforming from a mining concern to a plastics giant, Henry said Walker ``didn't come back to be a caretaker.''
``He plans to put his stamp on the company's direction.'' There is no set time for Walker to serve as interim chairman and chief executive officer, Henry said. Walker's goals are to identify an appropriate successor and to ``get the company headed back in a growth direction.''
Henry insists that Hanna's platform is right.
He said he wouldn't rule out anything for the future, but that barring unforeseen circumstances, Hanna is not likely to have to close any more plants.
Regarding published takeover rumors, Henry said AlliedSignal Inc. did not talk with Hanna officials earlier this year about acquiring the Cleveland firm.
When asked about the possibility of being a target now, Henry said, ``At the end of the day, it all depends on how big a pot of money is on the table,'' and he pointed out the company would have to consider many factors, such as what is best for customers and shareholders.