Meeting with Thierry Le Hénaff, Arkema Chairman and Chief Executive Officer
2017 will be remembered as a record-breaking year for Arkema, which in just over a decade has repositioned itself in specialty chemicals and now ranks among the industry’s top performers. The year was shaped by historically high financial results, significant acquisitions and investments, disruptive innovations and environmental stewardship. Chief Executive Officer Thierry Le Hénaff looks back at this remarkable performance.
What were the standout events and achievements of 2017?
Thierry Le Hénaff >
We’ve had plenty to celebrate, between our acquisitions in the United States, production investments in Asia and renewed presence among the Top 100 Global Innovators in Clarivate Analytics’ annual ranking.
Our victory in the Transat Jacques Vabre yachting race was especially meaningful. Skipper Lalou Roucayrol’s first place finish at the helm of the Arkematrimaran was also a win for Arkema innovation. His Multi50 sailboat was designed for and built with our highest-performing materials. Our innovation is on display every day in increasingly eco-friendly products that make life more comfortable in housing, transportation, new energies and elsewhere.
In 2017 we also opened our L’atelier 4.20 showroom at headquarters. This new venue packed with digital technology lets the public explore our groundbreaking innovations and six research platforms. It’s important to explain what we do.
How would you describe Arkema’s performance in the past year?
It’s simple: Arkema turned in the best performance in its history. Sales rose 10.5% to €8.32 billion and earnings before interest, taxes, depreciation and amortization (EBITDA) increased 17% to a record €1.391 billion on the back of strong results in our three business segments: Industrial Specialties, High-Performance Materials and Coating Solutions. We also achieved good growth in all three of our host regions (Europe, North America and Asia).
What were the key factors behind the year’s success?
The first is our teams’ unflagging engagement and enthusiasm in implementing our strategy worldwide. This growth-focused strategy has not changed since day one. It revolves around three key drivers: innovation (our DNA), selected acquisitions in our high-potential businesses and accelerated industrial investment in emerging economies.
The 240 patents we filed in 2017 (up 20% from 2016), which protect our know-how and position us in long-term niches, demonstrate the power of our innovation. We’re preparing major advances in wind power with a new generation of recyclable blades using our Elium® thermoplastic resin, as well as breakthroughs in transportation with lightweight technical polymers to replace metal and in 3D printing with a wide range of materials and solutions.
We continued to make acquisitions in adhesives for our Bostik subsidiary. After adding European sealants leader Den Braven in late 2016, we acquired U.S.-based CMP Specialty Products and XL Brands in 2017. These two outstanding companies give us a complete line of flooring solutions in North America. We also invested in India, China and Malaysia to increase production capacity for industrial adhesives, fluoropolymers, photocure resins and thiochemicals so we can meet strong local demand.
Lastly, our more intermediate chemical lines also contributed through their competitiveness and strong customer relationships.
How does corporate social responsibility add to this momentum?
We have fully integrated CSR policy into our growth strategy, through strong commitments to safety, the environment, individual and collective development, stakeholder dialogue and innovation. To give a few examples, the environmental programs deployed in the last few years reduced our greenhouse gas emissions in 2017 to below our initial target and our 1.6 accident rate per million hours worked is one of the lowest in the industry.
We’ve also initiated a comprehensive program to address diversity that combines awareness and training. The goal is to raise the percentage of senior management positions held by women to between 23% and 25% by 2025 from 19% today – an ambitious commitment in the often male-dominated chemical industry.
What is your mindset looking forward?
We will continue to count primarily on ourselves, more than on the macro-economic environment, fully confident in the quality of our projects. We’ll also continue to make acquisitions in adhesives and advanced materials and invest in production. In 2018, we will pursue work on the new bio-based polyamide production facility in Asia, which represents a significant investment of €300 million. This project will support our growth ambitions in emerging economies. In 2018, industrial capex will total around €550 million, up from €435 million in 2017. Our ambitions and high targets for 2020 and 2023 attest to our confidence in the future.
Lastly, how are you negotiating the digital revolution that is sweeping through the industry?
Our digital transition will make us even more agile and enhance our innovation capabilities. The recent appointment of a Chief Digital Officer, who reports directly to me, shows that we intend to make digital technology a part of all our businesses. Naturally, marketing and sales will be strongly impacted, first in the B2C segments targeted by the Bostik brands, but also in B2B segments with our Sartomer resins and technical polymers.
We’re also harnessing the power of digital technology in our building projects. 3D and 4D technologies considerably reduce time-to-start-up for new plants and optimize production line ergonomics. We saw the benefits of this at our Honfleur site in France, where we were able to design and simulate workstations with operators’ input and finish six months ahead of schedule. We will use the same technologies to build our polyamides facility in Asia.
In R&D, powerful molecular modeling applications help us develop new products faster, which is very important for patent filing.
Our digital transition will also make us even more attractive to top talent in our traditional engineering fields, as well as in new marketing and digital functions. So Arkema’s future will be more innovative than ever, but also more digital, in every aspect of the company’s operations.