28 August 2009 16:16 [Source: ICIS news]
By Joseph Chang
However, simply mashing disparate businesses together into operating units does not generate any real value.
This is especially true for specialty chemical companies, which tend to serve a variety of end markets.
Rogerson is striving to take the company out of Chapter 11 bankruptcy by March 2010 - a year after its filing.
"In the past, a lot of time was spent force-feeding a common strategy for all the businesses. But the fact is, there isn't one," he said. "There is no one strategy that covers crop protection, petroleum additives, urethanes and pool and spa."
And that's okay, he said. The businesses can make decisions separately, as well as take advantage of certain shared services such as IT systems.
Chemtura has submitted a five-year, long-range business plan to the unsecured creditors' committee and set a 30 October deadline for all claims against it - the first steps in valuing the company's assets and liabilities so it can emerge from bankruptcy.
The plan recognises the differences between Chemtura's many businesses. The strategies in the plan are business-specific and driven by the analysis of each one's competitive advantages, he said.
If employees are force-fed a strategy that doesn't apply, there is inevitably going to be that lack of belief that the strategy can be executed.
Chemtura's newfound religion echoes that of US-based specialty chemicals firm Rockwood Holdings. Both companies had close to $3.5bn (2.5bn) in sales in 2008 and both are comprised of very diverse businesses built through acquisitions.
Rockwood produces everything from lithium for electronics, autos and pharma, to specialty titanium dioxide, to advanced ceramics, elastomers and wood protection products.
Simplicity is essential, he said. The businesses make their own decisions according to their needs.
Ghasemi also offered sage advice for a company that has made 22 acquisitions since its inception in 2000.
"Beware of bankers bearing spreadsheets," he warned.
"Growth estimates and synergies calculated by investment bankers are exaggerated by a significant margin. Many times, they really don't know the businesses they are selling. You need to be very careful and do the analysis yourself - you can justify anything by adjusting numbers on a spreadsheet."
($1 = €0.70)
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