Lubrizol is known for its dispersants to separate particles in body-lotion and greases yet CEO Rebecca Liebert has spent her first year introducing initiatives that have the opposite effect: gelling the company together.
After taking some time to review Lubrizol, the former PPG and Honeywell UOP executive is rolling out an updated the strategy at the Wickliffe, Ohio-based company. One of the four priorities is to reduce complexity and create more harmony between divisions making additives and advanced materials.
Dispersants and surfactants are something of a playground for a chemist: there’s a head and tail, and a myriad of possibilities in between, depending on the length of the chain and add-ons like polymerisation.
If Lubrizol sticks to its core competencies, Liebert feels there’s more than enough to be getting on with.
“We were trying to be all things to all people and all things to all customers. That doesn’t work in the business world anymore,” she said in an interview with chemicalESG.
It’s meant taking a look at Lubrizol’s footprint and the opportunities to streamline everything from manufacturing and warehousing to the number of SKUs and suppliers.
Although there were some unique circumstances around the recent sale of a plant in Paso Robles, the move still offers some insight into Liebert’s approach. Once a hotspot for personal-care products, Lubrizol’s major surfactant customers moved out of California years ago leaving the Paso Robles plant under-utilised. There could be further nips and tucks as Lubrizol optimises its portfolio.
“It’s not like we are going to eliminate 10 or 15 locations. We have some minor structural clean-ups to do, but it’s not huge,” the CEO said.
Lubrizol currently has 54 plants, some are major operations like the historic Deer Park facility that’s been making lubricant and fuel additives since 1951. Then there are many smaller sites making solutions for sectors like beauty care or medical devices. Maintaining both flagship and specialty plants catering to niche markets is critical to avoid the loss of customers and upsetting the supply chain, she added.
Acquired by Warren Buffett for almost $10 billion in 2011, it’s understood Lubrizol had fallen somewhat out of favour in recent years after an accident in France and a decline in profit. It didn’t help that the other chemical company held in Berkshire Hathaway’s portfolio is paintmaker Benjamin Moore, a more consistent cash-generating machine.
Liebert didn’t want to rake through the past. A week before this interview she’d been with the Berkshire Hathaway board and got the thumbs up for the progress so far and the plans for the future.
“They are excited about what we found through our strategy refresh and how it’s taking us, not in a tremendously different direction, but really helping us get focused on what we’re really good at. That was part of the issue,” she said.
Liebert has some deep roots in surface chemistry. Her PhD researched the adhesion of coated polymer spheres to difference surfaces, using Total Internal Reflection Microscopy and light scattering to model how cancer cells attach to human tissue cells. On the face of it, perhaps overkill for the purposes of Lubrizol, but Liebert insists “the fundamentals of why surfaces interact are the same.”
Besides, there’s more to the 95-year-old company than the lubricant and grease additives it’s most famed for, the chemical-engineering doctor said.
Lubrizol has an equally rich CV, including the invention of Carbopol, a versatile homopolymers made from cross-linking acrylic acid with allyl sucrose or allyl pentaerythrivol that can be used in anything from body lotions and coatings to excipients for Mucinex drug tablets.
“We do have an amazing portfolio of products that’s appreciated by many but maybe not fully appreciated by most,” said Liebert, who came from seven generations of teachers but felt the call of the business world more.
“I knew some of the major products but if you start peeling back the onion inside, Lubrizol has some amazing technologies around hyper dispersants, polyurethane dispersions and formulated solutions for compressors, renewable diesel and fuels. Our focus is how we can leverage these technologies and innovations across One Lubrizol,” she added.
It’s hoped the appointment of a chief technology officer will help galvanise efforts on that front. Previously, its scientists would work on a green biosurfactant, for example, in one or the other side of the business, the full value of the work never realised across the entire surfactant and materials offering.
Even the SAP platform will move from two systems to one in the next couple of years, she said.
Liebert feels the chemical industry in general has yet to fully grasp the benefits of technology. Sitting on the board of Corteva, the agrochemical-and-seed company borne out of Dow-DuPont, has provided additional insight into the power of digitalisation, advanced analytics of data and the latest manufacturing processes. Using data from across Lubrizol’s 50 plus sites can enhance multiple areas from commercial policies to testing, maintenance and mechanical reliability.
It can also foment a bit of healthy intra-company competition, she added.
“Over the next five to 10 years, it’s going to be increasingly important. It’s going to bring a fundamental step up in what’s possible technologically,” Liebert said.