Wolfgang Buechele, chief executive officer of Europe’s largest maker of water-treatment chemicals Kemira Oyj (KRA1V), is poised to bring in ex-colleague Michael Loeffelmann to improve efficiency amid a strategy overhaul, two people with knowledge of the matter said.
Loeffelmann, who has worked at business consulting firms Roland Berger and AlixPartners, will join Finland’s Kemira to help oversee profit-improving programs, the people said, declining to be identified as the matter isn’t public.
Kemira’s revised strategy, to be detailed next month, will outline accelerated plans for emerging-market growth, bolt-on acquisitions and new products in areas such as lightweight packaging, Buechele, 53, said in an interview yesterday. While Buechele, who became CEO in April, said that he hired a person to improve efficiencies, he declined to give the name.
Buechele, a former BASF SE (BAS) board member whose career includes roles at Blackstone Group LP (BX) and Permira Advisers LLP, said the new efficiency role will span the current “Fit for Growth” savings program and ongoing efficiency measures beyond that. Kemira is closing 14 sites as it strips away 60 million euros ($78 million) in costs, and the reshape has extended to empowering regional business managers to bolster sales.
“Efficiency improvement is not a one-time approach but is becoming a going concern and that’s why I have hired somebody,” Buechele said, adding that the new hire is a person that he has worked with “intensively” before. He will report directly to Buechele.
Loeffelmann worked at Hungarian chemical maker BorsodChem when Buechele was appointed chief by Permira, with a mandate to restructure the company and restore it to growth. China’s Wanhua Industrial Group took over full control of BorsodChem in February 2011. Loeffelmann couldn’t be reached for comment.
An internal and external search is also under way for a replacement for finance chief Jyrki Maeki-Kala, who announced last week that he’s taking the equivalent role at oil company Neste Oil Oyj. (NES1V)
Kemira faces stiffening competition from larger, more diversified companies seeking to tap the so-called megatrends of population growth and increasing pressure on water supplies. BASF in December started production at a water- and paper- chemical plant in Nanjing, China and Ecolab Inc. (ECL) purchased rival Nalco Holding Co. for $5.4 billion in 2011 and is moving into oil and gas chemicals.
Shares of the Helsinki-based company on Feb. 6 fell the most in almost a year after it reported lower-than-estimated profit, with the company flagging heightened rivalry in the market for bulk water-treatment chemicals produced in quantities of 50,000 tons a year.
Buechele said his survival plan centers on producing the higher-margin, smaller-volume additives, avoiding the areas that the large plants of BASF will focus predominantly on.
Rather than major new chemical complexes, the theme of the forthcoming strategy presentation will touch more on research and development priorities, how to accelerate growth in emerging markets and introducing new products, including a planned investment in an innovative packaging material currently under trial, Buechele said. The blueprint extends beyond expansion and into areas such as efficiency and corporate culture, the CEO said.
“It will be a sharpened strategy, outlining where the focuses are and where we take it forward,” the CEO said. “Kemira before 2007 acquired quite a lot of different companies but hardly integrated them and that’s what created the dilemma we’re in.”
Buechele is also discussing potential acquisition targets with managers as the company seeks bolt-on technology for mining-, and oil-and-gas chemical operations. The mining industry remains largely fragmented in Africa as well as Latin America.
Kemira declined 1.2 percent to 11.07 euros as of 3:39 p.m. in Helsinki, giving the company a market value of 1.7 billion euros. The stock gained 1.8 percent in the last 12 months, while the OMX Helsinki 25 Index added 4.6 percent.
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