CLEVELAND — Phillip Ashkettle turned things around at Reichhold Inc. and now hopes to do the same at M.A. Hanna Co.
Ashkettle, 53, will become Cleveland-based Hanna's new president and chief executive officer June 14. He comes to Hanna after a six-year stint as president and CEO at Reichhold, a specialty polymers, adhesives and polymers systems maker based in Research Triangle Park, N.C.
While at Reichhold, Ashkettle helped increase sales from $800 million to $1.3 billion. Reichhold also moved from a net loss position to profitability under Ashkettle.
At Hanna, Ashkettle inherits a plastics compounding and distribution leader that saw its profit plummet from $65 million to $30 million last year even as sales increased from $2.2 billion to $2.3 billion. Decreased demand and problems installing a new computer system took a heavy toll on Hanna's bottom line.
Ashkettle said he plans to continue the customer-focused initiatives recently launched by interim president and CEO Martin Walker.
``Business starts with customers and markets, not at corporate headquarters,'' Ashkettle said at a May 25 news conference in Cleveland. ``You're not going to see a lot of corporate edicts going out of here telling people what to do.''
Ashkettle has previous plastics experience with Ashland Chemical's General Polymers division, which ranks as North America's largest resin distributor. He worked for Ashland in Dublin, Ohio, before joining Reichhold in 1993.
Walker, who returned to Hanna after Douglas McGregor resigned in October, will remain with the company for 12-18 months as Ashkettle learns about Hanna's business units. Walker said he was excited about the appointment of Ashkettle, who was selected from a field of 40 contenders for the top spot.
``We hit a home run,'' Walker said. ``Hanna is a good company with the potential to be a great company and [Ashkettle] is the guy to get us there.''
Ashkettle added that he believes Hanna can avoid some of the cyclical market patterns that affect many of its peers in Wall Street's specialty chemicals group.
``I'm not a big believer that a specialty chemical company has to be at the mercy of cycles like a commodities maker is,'' he said. ``We should be more diversified and have some protection against volume price pressures.''
Hanna's stock price, which began 1998 in the $25 range, stood at $15 May 27.
Ashkettle's selection ``is actually a coup'' for Hanna, said David Manlowe, a stock analyst with BT Alex. Brown Inc. in New York.
``[Ashkettle] is very respected in the industry and he's proven himself under fire,'' Manlowe said in a May 27 telephone interview. ``When you combine that with Hanna's strong incentives to increase shareholder value, it's a dynamite combination.''
Robert Bartels, a stock analyst with William Blair & Co. in Chicago, agreed, saying Ashkettle ``looks like an excellent selection'' for Hanna.
``[Ashkettle] has deep experience in the industry and he's got experience at turning a company around,'' Bartels said May 27 by telephone.
Bartels added Hanna is on track to improve its performance in 1999.
``[Hanna] has skinned down some operations and they've put some disruptive things behind them,'' he said.
At Hanna's May 5 annual meeting, Walker said the company is focusing on building its presence in the wire and cable, automotive and packaging markets. Currently, automotive makes up about 20 percent of Hanna's sales while packaging contributes about 10 percent and wire and cable adds less than 10 percent.
A recent industry study ranked Hanna as the third-largest compounder in the United States with between 5 and 6 percent of a market that was estimated to be worth $8.7 billion in 1997. The same study also placed Hanna as the largest U.S. color compound and concentrate maker with an 11 percent market share.
Hanna operates 16 compounding and colorant plants in the United States, six in Europe, and single plants in Mexico, China and Singapore.