The ICIS Top 40 Power Players No. 1: LyondellBasell CEO Jim Gallogly

05 December 2011 09:01  [Source: ICB]

1. JIM GALLOGLY, CEO, LYONDELLBASELL

The head of one of the world's largest polyolefins producers has led the company out of bankruptcy and transformed it into the most financially robust player in the space

Taking the lead position in this year's ICIS Top 40 Power Players ranking is Jim Gallogly, CEO of the world's foremost polypropylene (PP) producer as well as a major olefins and polyethylene (PE) manufacturer and refiner, LyondellBasell.

Gallogly has led Netherlands-based LyondellBasell through a troubled period. Using his solid industry expertise from more than 30 years in oil and petrochemicals, he has left his mark on the company. He is a worthy winner, voted into the top slot by ICIS journalists.

Jim Gallogly has applied strict management discipline at LyondellBasell to great effect. Financially, it is performing remarkably well, and in the 18 months since emerging from Chapter 11 bankruptcy protection in 2010, has become net debt free. Gallogly joined LyondellBasell as CEO in May 2009, just a few months into the 16-month Chapter 11 period.

Cash flow has been such that in November the firm said it would give investors a $2.6bn (€1.9bn) special dividend, financed from cash and the recent placement of new debt.

Gallogly and his team are laying the ground for the future, and in the US are seeking to capitalize on North America's shale gas advantage. Some investment projects have been deferred or abandoned during the tough times since the Chapter 11 period, but its cracker debottlenecking plans in the US put the company firmly back on the path to growth.

LyondellBasell senior management says it will give more details of growth projects at an upcoming investor day.

Core to the Gallogly philosophy is the "back to basics" strategy adopted by LyondellBasell. Since emerging from bankruptcy protection, the company has been focused on "operational excellence; cost reduction and revenue e_SDHpenhancement; capital discipline; portfolio e_SDHpmanagement; performance culture; and technology-driven growth."

The cost reductions have hit hard and caused disquiet in the workforce on both sides of the Atlantic, but the company has delivered impressive financial results. By the end of the third quarter, which Gallogly described "as our best quarter ever," it had $6bn in cash and no net debt. "Strict cash management is an integral part of our strategy and success," Gallogly told financial analysts. "We intend to be the top petrochemical company in the world," he added, noting that the company had already outperformed industry benchmarks.

If the firm's assets can be operated well, the LyondellBasell CEO believes it has a good chance of weathering whatever economic storms may be ahead - although LyondellBasell takes the widely held view that olefins chain margins will tighten in the next few years as fairly limited supply side additions are made to the system.

A DEVELOPING GROWTH STRATEGY
Gallogly, assisted by a chief financial officer brought back from retirement, Kent Potter, appears to have hit the right time to address the capital structure of the company, issue new debt and reward shareholders with the special dividend. Now a clear enunciation of growth strategy is needed - one that can be achieved within the financially disciplined approach adopted by the current management team.

Gallogly started his career in petrochemicals at US-based Phillips Petroleum, where he rose to become senior vice president of chemicals and plastics, vice president of olefins and polyolefins, and vice president for North America production.

He was president and CEO of US-based Chevron Phillips Chemical from 2000-2006, and until 2008 was executive vice president of Refining, Marketing & Transportation for US energy company ConocoPhillips. Prior to joining LyondellBasell in 2010, he was executive vice president of Exploration & Production for ConocoPhillips.

Given his background, he is a petrochemical man through and through. Operational excellence is in his blood.

Challenging times bring him to the point where he must help the company grow and adapt in an uncertain operational and demand environment. Gallogly has the task of taking LyondellBasell on to the next phase.

More on the ICIS Top 40 Power Players
By: Nigel Davis
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