SGR Client Profile: Innospec
The specialty chemicals firm delivers innovative technologies to a wide range of industries, from oilfields, fuels and refineries to power stations and personal care.
What do shampoo, fracking fluid, and diesel fuel additives have in common? They all contain specialty chemicals produced by Innospec, a global specialty chemicals company bringing innovative new technologies – aided by superior customer service – to market.
Innospec’s lifeblood is the development and marketing of new ingredients that allow its customers to create new consumer products. The company’s business is comprised of three basic industries: Personal Care, Oilfield Services and Fuel Specialties. Their common denominator: chemistry. “Behind the tailored products that we supply to our different markets, there are some basic chemistries that our markets have in common,” explains Brian Watt, Innospec’s Vice President of Strategic Planning and Regulatory Affairs. “For example, surfactants are the chemicals that allow us to combine oil and water, and create products that clean, or prevent deposits. Variants of this chemistry are used in shampoos and cleansers, in ‘frac’ fluids, and in fuel detergents. Similarly, silicone chemistry delivers high shine in hair-care products, and also prevents foaming of diesel fuel. Frequently, a very small amount of our chemicals can create a very dramatic impact in the final application – a little goes a very long way!”
Innospec is a truly global company, with more than 1,300 employees in 20 countries. Because it runs its business regionally, Innospec has major centers in Englewood, CO (serving the Americas), Ellesmere Port, UK (serving Europe, Middle East and Africa), and Singapore (serving Asia Pacific). The company has manufacturing operations across the U.S., and in the U.K., France, Germany and the Philippines.
But while forward-looking from a technology standpoint, Innospec is old-fashioned when it comes to the importance of good customer and employee relationships. “We back our products up with excellent customer service – we have one customer that needs on-time delivery in no fewer than 20 countries around the globe,” Watt explains. “We believe that a business is no more or less than its people – our relationships with our customers, and with each other, are paramount. We are not big users of videoconferencing – we would much rather talk face to face.”
A culture of compliance
Innospec weathered a storm of difficult legal challenges in the early 2000s, eventually emerging with an unwavering commitment to compliance. “The advent of the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act have underpinned the need for absolute compliance with laws and regulations,” notes Innospec’s CEO Patrick Williams.
Since Williams became CEO in 2009, the company has invested heavily in the process and people necessary to deliver a first-class compliance culture. It has been a hard road, and has taken some time to embed compliance into the fabric of the company, but it is a prerequisite to winning the confidence of customers, employees and investors in today’s world. Explains Williams, “Innospec has been able to move on from its troubled past, and has created an environment in which compliance is non-negotiable, and simply ‘the way we do things ‘round here.’”
A focus on sustainability
Innospec looks at this issue on two fronts. First, Innospec considers the resources used in making, using and disposing of its products. Innospec implements plans, updated annually, to reduce the energy it uses, the waste it creates and the carbon footprint of its products and its manufacturing operation. Innospec is a full member of the Roundtable on Sustainable Palm Oil, and the Carbon Disclosure Project. Second, the company looks at how its products can help its customers reduce their environmental impact. For example, Innospec has a wide range of products in its Fuel Specialties business that are designed to reduce fuel consumption, reduce pollution and emissions, and make engines safer and easier to maintain.
What’s in store at Innospec?
Constant innovation is the key to Innospec’s continued success in the future. “All of our core markets rely on a constant stream of new products being developed, to continually renew and improve the downstream products,” Watt explains. “So, all of our customers expect new products regularly.”
The Fuel Specialties business will be aided by legislation – already well established in North America and Europe, but just now being adopted in other areas of the world – requiring improved standards for air and fuel quality. To anticipate this demand, Innospec has recently established bases of operation in Brazil and Russia, and is in the process of enhancing its presence in China.
Innospec’s Oilfield Services business has been challenged by recent dramatic declines in both oil and gas prices, which have caused substantial reductions in customers’ investment plans. But with its broad range of products for drilling, “frac/stim” and production applications, this segment of Innospec’s business is well positioned to expand rapidly when oil and gas prices recover.
In the Personal Care business, future innovation by Innospec will mean shampoos or moisturizers that deliver better effects on the skin, are derived from more natural ingredients, or are devoid of many of the minor components that consumers view as undesirable. Historically, Innospec’s primary offerings to its Personal Care business were additives providing foam, or lather, for cleaning. But the company is now expanding into other product components, either organically or through acquisition, in an effort to “take a greater share of the bottle,” as the company describes it. One example: its 2014 acquisition of Chemsil now allows Innospec to offer “shine,” as well as a cleansing agent, to its customers.
So, the next time someone tells you how clean and shiny your hair looks, you may have Innospec to thank for that.
Smith, Gambrell & Russell has represented Innospec in major acquisitions, in litigation and in contract negotiations and other corporate matters, and also acts as primary outside legal adviser to the company’s CEO. We look forward to continuing our relationship with this innovative company.