Craig Rogerson envisions M&A strategy in key emerging markets

Craig Rogerson envisions an M&A strategy in key emerging markets

10:20 PM, 12th October 2011
Craig Rogerson envisions an M&A strategy in key emerging markets
Craig A Rogerson, Chairman, President and CEO of Chemtura Corporation.

Welcome to the World Of Chemicals - Expert’s Speak newsletter. This week, Shivani Mody, Principle Correspondent, World Of Chemicals News, speaks to Craig A Rogerson, Chairman, President and CEO of Chemtura Corporation. Rogerson talks about the general industry trends, expansion plans and the growth strategy in emerging markets.

Consolidation is the norm

Globally the industry is witnessing various changes. One of the prevalent industry trends is merger and acquisitions, which will continue in the coming years. Consolidation is the norm and the momentum will continue moving forward, says Rogerson.

Currently, the major demand is from Asian countries, which is a growth engine for the industry. In spite of the uncertainty, the spending and investment trend continues in these regions.

“Many end customers are now targeting potential in emerging markets. As solution providers, it is necessary for manufacturers to be present near their customers. Hence investments are increasing in these markets,” says Rogerson.

Focus on M&A and innovation

Chemtura has seven businesses within its reporting segments and the company will look to manage the portfolio. Some of the major growth industries are electronics, energy, transportation and agriculture. “Flame retardants have growing potential in Japan, Korea, Taiwan, China and India. We have recently announced new products for this segment,” says Rogerson.

A growth opportunity Chemtura will pursue is expansion in key emerging markets. Apart from organic growth, it will also pursue a merger and acquisition strategy in these markets. “An M&A strategy is a good first step to access the market, tap the potential and strengthen our position in the region,” says Rogerson.

Innovation and introduction of differentiated products is another way that Chemtura believes in gaining an edge over competitors and tapping market potential. Examples of differentiated products are the new products in the Urethanes segment.   Our new hot castable urethanes have unique cure characteristics and so, can be used for bigger, more intricate parts and help reduce waste,” informs Rogerson.

Potential in Brazil, China and India

The major emerging markets for Chemtura are Brazil, China and India. Chemtura is expanding facilities, opening technology centres and actively seeking opportunities for joint venture or acquisitions in these regions for growth. In 2010, 24 per cent of our revenue came from the Asia Pacific and Latin America regions and in the next five years our aim is to increase it to 50 per cent,” says Rogerson.

Considering emerging markets, China continues to grow rapidly as a market for petroleum additives and synthetic lubricants. The company is also considering M&A opportunities, particularly in the agriculture sector. “With the rapid growth, China is taking policy measures to slow down the phenomenon and take control of the situation. Despite stricter policies, the spending continues which is good news for the industry,” explains Rogerson. Chemtura has expanded operations in China with an application and research and development  centre. 

As for India, Chemtura acquired a company near Delhi for its Chemtura AgroSolutions business, to expand access into the market. Chemtura will focus on fulfilling requirements of niche crops in the region. “In India we intend to build relationships with universities to drive innovation across our business including the agricultural sector, for instance for seed coatings. Other areas for mutual cooperation could be pharmaceuticals. “A major issue that the Americas and the European regions face is an increasingly aging population. This has potential for the pharma industry that is all geared up to innovate for the demographics. Also with expiring patents, the need for new and better solutions is driving the market,” informs Rogerson. 

“India provides a growing opportunity for us though the lack of infrastructure poses a challenge,” feels Rogerson.

Another segment that has growth potential for Chemtura is brominated performance products. The company sees high demand for these products used to address specific performance, environmental and regulatory requirements.

“However, the growth story in emerging markets is not just China and India. We see growth opportunity in Brazil as well. It is an important market across our businesses especially for our Chemtura AgroSolutions and AO/UV product lines,” says Rogerson.

‘Greener’ opportunity for growth

With increasing awareness and stricter government policies and environmental concerns, the industry is rapidly moving towards ‘greener’ solutions.

“An important global trend in the chemical industry is reducing waste and increasing the use of greener products. The main objective is now sustainability and protection of the environment,” says Rogerson.

Other than the emerging markets, Rogerson cites opportunity in the Americas and the European region.

© Matthew Johnson, SkyscraperSunset

Perspective on 2011 - International Year Of Chemistry (IYC)

Being celebrated as the International Year Of Chemistry (IYC), 2011 was an endeavour to create awareness about chemistry, its benefits and attract students toward the field as a long term career opportunity. As we near the end of the year, concern is how to keep chemistry in focus beyond 2011. 

The core committee organizing the IYC 2011 created an initial splash. People are aware of chemistry but it is viewed in the negative context. This is a challenge the industry faces. The effort was to create awareness about benefits of chemistry, inform the public and get kids interested in the field. With the IYC 2011, the work has started but the momentum has to continue to achieve results,” says Rogerson.  

“The chemical industry needs to work collaboratively with government agencies across the globe to provide solutions to today’s and tomorrow’s problems.   There is a continued need to advocate the business of chemistry. While we have seen some impact of IYC 2011, the effort must continue,” feels Rogerson.

As part of the IYC 2011 campaign, Chemtura has restructured its web site making it easy to navigate and more user friendly. “Our web site restructuring was part of our IYC 2011 effort, but is only a first step,” says Rogerson.

(C) WOC News

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