Early push to diversify rides out pandemic
For many manufacturers, the pandemic has been a drawn-out slump that started when China’s factories shut down in January.
Most scrambled to get out of China, but Ascend Performance Materials, a Houston chemical maker, acquired a factory. And while other manufacturers struggled to diversify their product lines and bring supply chains home, Ascend already had.
Ascend learned to look ahead after emerging from bankruptcy in 2009. The financial problems forced the company to find new markets for its polymer, nylon 6,6, as it added airbags, car parts and zip and cable ties to established markets in high quality carpet and women’s pantyhose.
That strategy has worked for the company, which ranked No. 6 on the Chronicle 100’s list of the largest private companies. Ascend, which reported $2.6 billion in revenue in 2019, employs 2,600, including 1,200 in Houston.
Perhaps the company’s history reminds president and CEO Phil McDivitt to always keep an eye toward the next product that could use a strong nylon fiber, such as personal protective equipment used in health care.
Ascend has developed a technology to use its resin in medical-grade surgical masks, for which it is seeking approval from the Food and Drug Administration. The company said independent testing found the materials in the mask are greater than 99 percent effective at deactivating viruses, including the virus that causes COVID-19.
“(This technology) has the potential to help restart the economy, restart schools and keep people healthy,” McDivitt said. “We really foresee our ability to build the medical business as a whole new segment of the company.”
Ascend has not been immune from the pandemic. The shutdown of auto manufacturing, which accounts for about 60 percent of revenues, hit the company hard.
Ascend, however, has positioned itself for the rebound, particularly in China, where vehicle production is ramping up. In May, the company announced it would acquire a factory in China.
Ascend has avoided layoffs. As the COVID-19 crisis continues, McDivitt said the most important strategy is communication.
“It’s important to be really transparent and honest about what’s going on in the business,” he said. “We have to be very agile.”