May 3 (Bloomberg) -- Kemira Oyj Chief Executive Officer Wolfgang Buechele said he’s taking a more active stance on acquisitions while the Finnish company’s historic water-chemical business will be used to generate cash rather than growth.
Kemira is looking to add technology and broaden its product range in areas including additives used in oil and mining. While assets are available in those industries, price tags are currently out of synch with buyers’ budgets, the former BASF SE executive said in an interview.
“A lot of companies in the oil and mining space, particularly in the U.S., are per se available, but the asking multiple is so high, you have to ask yourself does this really make sense,” said Buechele. “The longer the market is in a wait-and-see position, the more inclined the sellers will be become to revisit their asking price, that’s my assumption.”
A year into his role, Buechele is pushing through a transformation of the 93-year-old company, pursuing growth in paper as well as oil and mining additives. Units making water-treatment chemicals and bleaching agents will be optimized for efficiency and run for cash.
Buechele plans to raise profitability to 15 percent by 2016 from 8 percent last year in terms of earnings before interest, taxes, depreciation and amortization as a proportion of sales. The paper, oil and mining markets have better prospects than water purification for municipalities. Only 40 percent of Kemira’s product line is currently in faster-growing markets, and research budgets will be focused on those areas.
Kemira is conducting the initial interviews for the position of chief financial officer, to replace Jyrki Maeki-Kala, who left to take up the same position at Neste Oil Oyj. An appointment may be announced in the coming weeks, said Buechele, who has temporarily taken over Maeki-Kala’s responsibilities.
An appointment will be set against the challenge of convincing workers that the Finnish company needs sweeping changes as the CEO eliminates 600 jobs to boost efficiency. The program caused employees in Finland to push management to consider hiring extra workers to relieve pressure on remaining staff with increased workloads.
“The pace of change is something that is challenging at this point for many Kemira employees but I am sure we will get there,” Buechele said.
Kemira shares have advanced about 8 percent since April 23, when Buechele announced the 15 percent profitability target and his plan to increase investment for the paper, oil and gas industries.
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