In a move intended to improve growth worldwide, Chemtura Corp. is restructuring its business.
The plan combines the Middlebury, Conn.-based company's plastic additives and flame retardants divisions into a single unit called polymer additives.
``The businesses were very product-oriented,'' Mark Chrisman, vice president of global sales for polymer additives, said at Chinaplas, held May 21-24 in Guangzhou. ``Previously we were managing chemistries, not markets.''
Single clients often would be contacted by more than one Chemtura sales person, Chrisman said, each representing different divisions of the company.
``Now we will have sales leaders for each of our individual segments,'' he said.
The new organization will include three units in addition to polymer additives - performance specialties, consumer products and crop protection. With the new structure, the company aims to achieve an annual growth rate of 20 percent. Chemtura reported sales of $3.7 billion in 2006.
The firm is the result of a series of recent mergers. In 2005, Great Lakes Chemical Corp. and Crompton Corp. merged to become Chemtura. After all the changes, some reorganization is inevitable, said Lawrence Lau, commercial manager of plastics additives for the China region. The firm has facilities in Europe, the U.S., Saudi Arabia and South Korea.
``We had to put our house in order,'' Lau said.
The reorganization is expected to cost the firm $25 million to $35 million and calls for cutting its workforce by 10 percent, or 620 employees. The downsizing will take about two months and involves closing antioxidant facilities in Pedrengo and Ravenna, Italy; and a related, intermediates plant in Catenoy, France.
``Although significant gains in productivity have been made in recent years at Pedrengo and Ravenna, those gains have been overshadowed by increasing operational and raw material costs,'' said polymer additives group President Anne Noonan in a news release.
The new structure also will increase the firm's focus on emerging markets and includes a new regional headquarters in Shanghai.
``A lot of the transition compound and resin companies are establishing manufacturing bases in China and setting up their regional offices in Shanghai,'' Chrisman said.
The company's plastic additives arm does around 40 percent of its business in Asia and already has two plants in Dongyang and Nanjing, China. Similar efforts are being launched in Russia, Eastern Europe, India, Brazil and other emerging markets.
``Before, we had the equivalent of half a person in Russia,'' Chrisman said. ``But these economies are growing so fast, we need to have people on the ground.''
The company now will support a full-time position in Russia and hopes to begin work with local companies to develop tailored products. In China, the process already has begun. Chemtura's recently announced Firemaster 800 flame retardant was developed specifically for China's market, Chrisman said. The company modified its Firemaster 550 to make it more cost-effective.
``Firemaster 550, on a cost-per basis, was too expensive for the market that was already in existence,'' he said. ``We wanted to create a new product, not lower in price but lower in dosage.''
Firemaster 800 currently is available only in China, but soon will move into other markets, Chrisman said. Market-specific products are expected to advance the company's aims for growth, increasing Chemtura's focus on customer demands.
``We're trying to transcend the product line so we're not a commodity,'' Chrisman said. ``We plan to capitalize on specialized products - we are not going to allow ourselves to lose our differentiation.''