The Group provides services in the business segments of advanced intermediates, custom manufacturing and care chemicals on a global scale. In addition, WeylChem Innotec offers services in the fields of analysis and synthesis. Birgit Megges asked Antti Koivisto, head of the Advanced Intermediates business unit, about the development of the division and the strategies for its continuous growth.

CHEManager: Mr. Koivisto, advanced intermediates are chemical products in regular production that are not manufactured exclusively for one customer. How is the business developing and which products are currently in particularly high demand?

Antti Koivisto: We have been able to capture growth in the Advanced Intermediates business over the recent years through intensifying the dialogue with our customers. Nevertheless, I trust we can still noticeably grow as long as the product offering matches the market need. This also requires regular revision of production assets and possibly investing in added capacity. But capacity expansion is only one thing. If we can also produce smarter, flexible, more efficiently and have the most optimized portfolio we will be at the top of the game and able to react faster to changes in demand on a global level.

The global demand is currently on a high level for all our major products with growing interest in some of the exciting new application areas, like for our high-performance polyether polyol Velvetol, to be used for example within footwear, industrial coatings and ink-jet formulations. Expectedly, the demand will also continue to grow for all sustainable bio-based applications, where we are already partnering with customers with products like glyoxylic acid in addition to Velvetol. Furthermore, some of our cornerstone products such as glyoxal, the coupling reagent Allessan CAP, which is frequently used in the pharmaceutical industry, our oxidation products and chlorine derivatives family continue to positively contribute to the success of our business.

How is the line product business currently positioned?

A. Koivisto: Quality is the key. We are positioned as a trustworthy quality supplier on the market, which is also repeatedly confirmed by our customers. We also know that the reputation and appreciation towards our technical know-how is on a high level. Together with a well-functioning supply chain, this provides us the license to operate as well as a solid foundation for further improvements.

However, the results of an extensive customer satisfaction study showed that some elements such as timely response, communication and true partnering with customers were lagging behind a little. Sometimes it was mentioned that we were too much focused on internal processes. Unintentionally shifting the highest priority away from the customer centricity and starting to “overengineer” internal processes instead is not an unusual phenomenon, and I have already witnessed this a few times in my career in different organizations. I feel we have now a healthy combination of both processes to deliver the improved customer experience.

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“We will continue to invest in our digital platforms.“

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By centralizing all marketing and sales activities under the WeylChem International umbrella in 2019, we started to draw the lessons learned regarding our internal process improvements for a better customer experience together with the fine-tuned, resourceful and experienced sales and marketing organization. With the help of this framework, we were also able to move away from somewhat isolated offerings of individual group companies. Today, we not only have more and more partnerships, cross-selling and projects with customers, but also improved internal collaboration, which transformed us more into a solution provider.

How do you ensure further growth for this business unit?

A. Koivisto: Our growth model starts at our customers and we have invested a lot of work in understanding their needs and business even better and how we fit into that picture. This has helped us significantly to understand the value-in-use piece we deliver but also, I think, it has helped us to understand who we are and what can we do more for our customers. We can also benefit even more from our ideal size and flat hierarchies to become a more agile, flexible and reliable partner globally. Our original strategic focus on Europe is more and more combined with active participation in global markets and we have gradually moved away from only serving the domestic European markets, and this trend will continue also in the near future, including growth plans in Asia and the Americas.

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“We have gradually moved away from serving only the domestic European markets.“

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To achieve growth, I implemented three strongly connected growth platforms for Advanced Intermediates: The first one provides a framework for our activities to grow the strategic markets and our market presence outside of Europe. The second platform deals with the question of how we relate to our customers and build trust with them. The third one is focused on our innovation presence and especially looking into new application areas and building a new product and innovation strategy together with our customers. Although we can still grow with the existing product portfolio, we also pursue continuous product development.

Are there any investments planned in the near future?

A. Koivisto: Our growth will also be fueled by a number of investments. In the Advanced Intermediates business, we started expanding our New Business Development team in 2019. We also felt the need for launching a technical marketing function in 2020. This function will offer our customers an innovation partner and support them with detailed technical questions and expertise within the new application areas, perhaps further supported by our team at InnoTec. We will continue to invest in enhancing our range of new chemistries and products, such as the Halex process, and we have other projects underway to invest and expand existing products and introduce new products.

We will also continue to invest in our digital platforms, for example in our CRM platform and in our ERP and SAP systems, which will be updated to the latest standards throughout the group — and more will follow.

How do you think the current coronavirus pandemic will change the chemical industry market?

A. Koivisto: The pandemic will accelerate the changes in strategies and how we do business. I feel that strategic business cycles are getting shorter and business strategies are becoming increasingly incremental. I’m expecting a little paradigm shift of the markets, maybe even permanently, and this change may require a reaction. The smallest local players will disappear, the supplier network will consolidate, and players will operate even more globally than before. At the same time, however, we are convinced that with often completely regional supply chains of raw materials — if we have not produced them ourselves — we will achieve a competitive advantage and a healthy additional level of supply security for us and our customers in the future. Ultimately, truly risk-minimized supply chains are a combination of local partners and alternatives at the global level, because crises rarely occur everywhere at the same time, but rather have a regional character or affect individual regions in cycles.

Therefore, we will also need to be more supple within our strategic growth platforms and refine them and the overall business strategies as they evolve. Safeguarding people and know-how, understanding and mitigating the business risk, as well as efficiently managing resources, capital and processes has become an even more important element. Furthermore, the importance of reliable and stress-tested in- and outbound supply chains has grown. The focus will be more on local partnerships and shorter chains.

We at WeylChem have worked on different growth scenarios. I think that if the current pandemic outbreak subsides, we will initially see unusually high demand in some market segments. The winner will be the one who is willing to perform at a high level and deliver solutions quickly. It will take some time for the markets to normalize and for a "new normal" to emerge.

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Personal details:

Antti Koivisto studied International Business & Finance at University of Lincoln and in addition completed a B.B.A. in management. He has also completed an Executive MBA from Hanken School of Economics. He started his chemical career in the UK working for BASF where he held a number of sales and marketing management roles with increasing responsibility. After other stations at Orica and Dow, he joined WeylChem in 2017 and is today leading the sales and marketing platform for the Group.