Features

The Right Chemistry

By Tom Branna, Editorial Director | November 4, 2010

With a knowledgeable team in place, an ambitious growth strategy and a strong pipeline of products, Lubrizol is determined to become a billion dollar player in the personal care and home care space.

When the global economy started heading south a couple of years ago, Lubrizol’s leadership didn’t deviate from its game plan. The company was well into integrating the businesses from its purchase of Noveon, Inc. and was determined to accelerate plans to build on a solid acquisition. Now, with the economic recovery underway, company executives maintain that they’ve found the right combination of talent, product and innovation to build the business into a major player in the global household and personal products industry.

Noveon Consumer Specialties, representing personal care, HI&I and pharmaceutical and food ingredients, accounted for just shy of $500 million of Lubrizol’s $4.6 billion in revenue last year, yet company executives are determined to build a $1 billion business. To achieve that kind of growth takes focus and involves a winning combination of the right technologies, people and acquisitions—and a strong international presence. As such, Lubrizol has built a global network that includes recent expansions in technical sites in the U.S., Mexico, Brazil, Europe, India and China. To further sharpen focus, the business was recently divided into two market-facing units: Home & Personal Care under Rick Tolin, and Food & Pharmaceuticals under Mary Clarke.
 

Lubrizol’s subject matter experts include (l-r): Ashoke Sengupta, Krishnan Chari, Mark Paczkowski,
Douglas Barr and Nancy Marchant.
When Lubrizol acquired Noveon in 2004, it marked the beginning of a fruitful collaboration, recalled Robert Graf, corporate vice president-R&D, Lubrizol.

“The language of chemistry is the same at the molecular level,” he explained. “We are able to exchange people and ideas from one group to the next. That collaboration has led to some real breakthroughs for both sides of the business.”

Reaching New Consumers
Like many of its customers, Lubrizol is determined to identify and serve the needs of world’s growing consumer class.

“We’re looking to service the needs of the next billion consumers and we’re investing where our customers are investing,” explained Tolin, who is global business director, personal care and home care for Noveon Consumer Specialties, Lubrizol Advanced Materials, Inc. “That’s why we provide technical services in more than 100 countries and operations in 26 countries around the world.”

In fact, company executives predict that Lubrizol’s sales in emerging markets will double in the next 10 years. And as its global footprint expands, so too does Lubrizol’s capabilities and knowledge base. The company dedicates 4.6% of revenue to R&D—a high percentage for a specialty chemical company, noted Tolin.

“We’re always planning three to five years out. With 160 PhDs on staff, our company is technology- and idea-led,” explained Tolin.

And what are these teams working on? Across the business, Lubrizol’s expertise in surface science comes into play.Lubrizol’s mission is to care for and protect surfaces whether they are hard—such as a countertop—or softer—like the skin’s stratum corneum.

“It’s a focus on improving the quality of consumers’ lives, from applications in cleansing, hair care and skin care,to surface and fabric care,” said Julie Shlepr, global strategic marketing director, Consumer Specialties. “Our technologies enhance the visual and tactile appeal, functional performance and convenience of these fast-moving consumer products. We’re successful when we help our customers build winning brands and consumer loyalty.”

A Full Pipeline
Global R&D director—and one of those 160 PhDs—Christopher Murphy called Lubrizol a world-class rheology expert with an outstanding technical services team that can teach customers the benefits of the products, how to use the materials and provide solutions to formulation problems.

“We have a powerful pipeline of new products and the testing capabilities to ensure their efficacy,” observed Murphy.

One of the newest innovations from Lubrizol is Carbopol Aqua SF-2 polymer. It enables formulators to create low pH, high clarity cleansing formulations at the low pH levels needed for food grade preservatives. According to Murphy, formulators can now design high clarity cleansing formulations with unmatched suspension of eye-catching and insoluble ingredients while making marketing claims such as “paraben-free.” Among the applications for Carbopol Aqua SF-2 polymer are clear bath gels, shampoos and conditioners; pearlescent body washes and shampoos; facial and body scrubs with suspended microcapsules or exfoliating beads.

Another new product, launched earlier this year, is Novethix L-10 polymer, which the company describes as an easy-to-use liquid thickener designed to thicken and improve the flow properties of a broad range of cleansing applications, including difficult-to-thicken systems. According to Lubrizol, the polymer provides efficient thickening; excellent clarity and a rheology that yields products with excellent pourability and material drain. It is also suitable for non-aerosol spray applications, improves product cling and reduces product drip from nozzles.


“Our board challenges us to come up with out-of-the-box ideas,” says Bob Graf, corporate VP R&D, Lubrizol. “It's about understanding the customer and understanding the chemistry.”
A Broad Knowledge Base
Launches such as those underscore Lubrizol’s knowledge base, which has led to the development of 1,600 active patents.

“We understand polymer differentiation in depth,” asserted Murphy. “We understand the different sensory “fingerprints” of our polymers. We’re working on developing polymers that provide improved compatabilities and a better dry feel. Further, we’re expanding our focus on fundamental R&D with the addition of deep subject matter experts on our team.”

These new and pending product launches all play a key role in Lubrizol’s growth strategy. According to Schlepr, these growth strategies include:
• Deepen and broaden customer relationships;
• Fuel faster growth in emerging markets;
• Accelerate development of innovative new products;
• Expand new business development; and
• Expand manufacturing capabilities to support long-term growth.

Potential Acquisitions
Intertwined with these objectives is the need to maintain an eye on potential acquisitions.

“We think that this can be a billion dollar business,” insisted Greg Taylor, vice president, corporate planning, development and communication. Earlier this year, Lubrizol was a finalist in the Cognis sweepstakes, a contest where the eventual winner was BASF. However, Taylor remains committed to expansion in the personal care and consumer specialties space.

“We are serious about growing personal care and consumer specialties. There are lots of small candidates, alliances and maybe some big candidates,” he explained. “There are wonderful, $50 million companies with wonderful relationships (with customers); especially in actives.”

The aforementioned goal is to build a billion dollar business—at least. According to Taylor, that’s the scale you need to be a global leader and central supplier on more than one front. But while Lubrizol is aggressively shopping for new opportunities, it’s kicking the tires and checking under the hood too.

“We’re looking for a good solid team—not a fixer upper,” he explained. “We want quality people with market position.”

Whether it’s via new products, new markets or new collaborations, Lubrizol executives say they are determined to solve their customers’ problems.

“Innovation is an overused word, but our board challenges us to come up with out-of-the-box thinking,” said Graf. “It’s about understanding the customer and understanding the chemistry.”

Serving customers and understanding chemistry are two areas where Lubrizol excels in the global household and personal products industry.
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