A merger and a spinoff in the future
The Woodlands’ Huntsman Corp. thrived in recent years by taking the unwanted parts and divisions of other companies and transforming them into high-performing businesses, said Chief Executive Peter Huntsman.
“We have a unique culture of people who get the job done,” Huntsman said. “I know that sounds glib, but it’s true.”
That model for the growing specialty chemicals giant is expanding further in its upcoming “merger-of-equals” with Switzerland’s Clariant into a $14 billion company called Huntsman Clariant.
In addition to improved market conditions, that ability to take subpar parts and turn them into something more helped Huntsman more than triple its net profits in 2016. Admittedly, that comes after a disappointing 2015. “We started at something of a lower base — that’s not something I’m particularly proud of,” Huntsman said.
He touted its epoxy resin adhesives business, which was one of its worst performers, and is now near the top. Every major jetliner today has 20 tons of Huntsman epoxy per plane, he said, as the airline industry moves away from aluminum parts.
Likewise, in the automotive sector, BMW just recognized Huntsman as its most innovative parts supplier, particularly highlighting the more environmentally friendly, polyurethane foam seating used in the vehicles.
Huntsman employs about 1,000 people in The Woodlands, plus a couple hundred more workers in regional manufacturing facilities in Houston, Conroe, Alvin, Dayton, Port Neches and Freeport. Overall, Huntsman employs for about 15,000 people in more than 30 countries.
The next big step is in July when Huntsman spins off its pigments business into a separate publicly traded entity, called Venator Materials Corp. The name comes from the Latin word for hunting to maintain the Huntsman family legacy.
The deal will help lower Huntsman’s debt as it goes into the Clariant merger. Peter Huntsman would become the CEO of the combined company with Clariant chief Hariolf Kottmann as the chairman. Huntsman’s father, Jon Sr., who founded the company, becomes chairman emeritus. The new company will be formally domiciled in Switzerland with its operational headquarters in The Woodlands.
“Next year we’ll be a completely different company,” Huntsman said, with stronger balance sheet and profit margins than ever.
After Huntsman went public in 2005, Peter Huntsman moved the family business from Utah, where it was founded, to The Woodlands, where it would be closer to its plants, customers and supplies of natural gas that provide the feedstock for petrochemicals.