TARRYTOWN, N.Y. (July 15, 12 p.m. EDT) — For Ampacet Corp., it's the half-a-billion-dollar question.
What's going to happen to the company when Norman Alexander, who's been its sole owner since 1954, passes away?
Alexander is in good health, but he'll celebrate his 88th birthday later this year. Although Alexander is not involved in Ampacet's day-to-day operations, he holds all the cards at the Tarrytown, N.Y.-based firm, which ranks as one of the world's largest color concentrate makers, with sales of $503 million in 2001.
Alexander declined a request to be interviewed, but Ampacet President Robert DeFalco — who added the chief executive officer title to his job description earlier this year — said he is not worried about the post-Norman Alexander future.
“Mr. Alexander has planned for the inevitable,” DeFalco said in a recent phone interview. “His estate is set up so that Ampacet will continue.”
Two of Alexander's four children — a son, Mark, and daughter, Gail, each of whom also declined interview requests — sit on Ampacet's board of directors. DeFalco credited Norman Alexander with continually reinvesting in the company rather than cashing out.
“[Norman Alexander] hasn't taken any money out of this company,” said DeFalco, who joined the firm in 1983. “He's reinvested in it and wants to see it continue to grow.”
MAN OF INTERESTS
Alexander acquired Ampacet, then known as American Molding Powder Co., from plastics pioneer Anton Bamberger and other investors in 1954. The Bamberger-led group had purchased the firm in 1941.
The name Ampacet is short for American Molding Powder acetate. The company's original product was an acetate recycled from nylon stockings and converted into parachutes for U.S paratroopers in World War II, as well as into such early plastic products as injection molded combs, brushes, housewares and toys.
Alexander's other business interests almost make Ampacet look like a weekend hobby. He's chairman and CEO of Sequa Corp., a publicly held industrial conglomerate that posted sales of $1.7 billion last year. Alexander is the largest single shareholder of Sequa, which operates businesses in the aerospace, propulsion, metal coating and specialty chemicals markets.
As if Sequa wasn't a big enough gig, Alexander was chairman of Chock Full o'Nuts Corp., a coffee maker that had annual sales of $350 million when it was sold to Sara Lee Corp. in 1999,
When he bought Ampacet in 1954, Alexander was owner of Ansbacher-Siegle Co., a New York-based pigment maker that was one of Ampacet's suppliers. Three years later, Ansbacher-Siegle merged with Sun Chemical Co., a major producer of printing ink, with Alexander assuming control of the combined company.
In 1986, Sun Chemical sold its ink and organic pigments businesses and purchased Chromalloy America, a St. Louis industrial conglomerate in which it had been a minority investor. Sun changed its name to Sequa the following year.
In a Sun Chemical profile published by Ink World Magazine in 2000, Sun Chairman Edward Barr praised Alexander, saying he “started Sun on the road to modern management in terms of marketing and investing, and he made a number of terrific moves.”
Ampacet officials said there's no business link between Ampacet and Sequa. Ampacet is not a supplier to any of Sequa's numerous divisions, and Alexander always has run the two separately.
His hands-off management style was evident in the career of David Weil, who served as Ampacet's president and CEO for almost 30 years. Weil essentially ran Ampacet for Alexander before handing DeFalco the reins in 1998 and retiring earlier this year.
For its part, Ampacet is not sitting idly by and hoping for its financial fortunes to improve in 2002. Sales in 2001 were down 6-9 percent, DeFalco said, but the firm has worked to reduce costs by sourcing raw materials “from anywhere in the world” and is adding a total of six new extrusion lines and 20 million pounds of capacity at plants in Telgate, Italy, and Heath, Ohio, by the end of the year.
With a North American market share of about 17 percent, Ampacet is the region's largest color concentrate maker. Globally, DeFalco said, Ampacet trails only Swiss chemicals giant Ciba Specialty Chemicals AG.
Ampacet also is taking a look at acquisitions of companies with sales of $40 million or less. The acquisitions probably would be in more specialized concentrates, including some based on engineering resins, DeFalco said. The company could announce an acquisition in North America or Europe by the end of the year, he added.
North America accounted for 60 percent of Ampacet's sales last year, with Europe chipping in 25 percent and South America and Asia splitting the remaining 15 percent. The firm employs 1,250 and operates 900 million pounds of extrusion capacity at a dozen plants worldwide.
Ampacet's global approach to logistics also has helped to improve its inventory control.
“We've learned a lot about inventory control in the last two years,” DeFalco said. “We're looking at it as a new ballgame and being extremely careful about having too much material on hand.”
With its heavy focus on film, Ampacet naturally has been affected by overcapacity in that industry, where operating rates have lingered as low as 60 percent in recent years. DeFalco said he hopes to see the film situation improve through a major capacity reduction in the film extrusion community.
On the new product front, Victor Mimeault heads Ampacet's efforts as vice president of its technical unit. The firm plans to introduce two new conductive grades in both black and white for injection molded nylon compounds by the end of the year. Work also continues on compounds that can be used in more- durable and higher-yielding films.
“Film is thought of as a somewhat mature market,” Mimeault said. “But newer grades of resin and new coextruded multilayers put greater demands on our materials, and we have to keep up.”
“There's re-engineering and rematching of our product to the [film] application with each layer.”
Ampacet also is expanding the color palette it offers in injection molding grades of high-impact polystyrene. Such compounds are in demand in large parts for appliances and computer applications, Mimeault said. New grades of colored PET also are in the works for use in bottles for iced tea and flavored drinks.
A strong emphasis on analytical equipment leads Ampacet to spend $300,000-$400,000 on updates and new purchases for its lab sites every year. Recently, the firm has needed to re-examine the feeding systems it uses to place additives in its products, because of customer requests for more-complicated additives, including new forms of antistats, ultraviolet light inhibitors and slip agents.
“There are additive products out there that weren't even possible 10 years ago,” Mimeault said. “And we've got to look at them in terms of 1,000 whites and 1,000 blacks and all the other products we make.”