DALLAS – Angus Chemical Co., which Dow Chemical divested on Feb. 3, is preparing to launch a new extended-life, multifunctional amino alcohol for use in metalworking fluids in the years second half, one of the first products from a pipeline that is being recharged under new ownership, said Michael D. Lewis, the companys business vice president.
Golden Gate Capital paid over $1.2 billion for the global nitroalkanes and derivatives manufacturer, and took possession of a slate of primary and tertiary amino alcohols and corrosion inhibitors that are used in metalworking fluids, oil and gas, water treatment, coatings and other applications. It also acquired the Angus headquarters and research and development center in Buffalo Grove, Ill., manufacturing plants in Sterlington, La., and Ibbenbueren, Germany, a packaging plant in Niagara Falls, New York, process technologies and other assets.
Golden Gate is moving now to invest further in R&D, sales and customer support, Lewis told Lube Report. Metalworking fluids are a major target as the company stretches towards its goal of doubling its current size and hitting the $1 billion mark in sales within five years.
Metalworking is one of four core market segments at Angus, Lewis said, speaking on the sidelines of the Society of Tribologists and Lubrication Engineers meeting here. Were very focused on metalworking fluids, paints and coatings, personal care and life sciences, which includes pharmaceutical and agriculture. Metalworking fluids may not see the same organic growth rates as some of the others, but its a mature and solid market, and very accepting of our chemistries.
The new multifunctional additive has a working title of CorrGuard Next, and will offer neutralizing and fluid-life properties which complement those provided by the companys top-tier CorrGuard 95 and CorrGuard EXT products, Lewis said. Its new for this industry, but its chemistry weve already been involved in so it will have a comprehensive regulatory profile already in place for the United States, Europe and Asia. And well be able to manufacture it in Louisiana or in Germany.
Regulatory issues loom large in the metalworking arena, as Angus metalworking fluids scientist Patrick Brutto reminded the STLE meeting. Some long-standing chemistries — boron condensates and boric acid, formaldehyde concentrate biocides like triazine, secondary amines like DCHA (dicyclohexylamine) and others — will need to wear scary health and environmental labels, or are becoming unpalatable to customers for other reasons. This will create openings for alternative chemistries, and for the suppliers who can optimize them in metalworking fluids.
Dow acquired Buffalo Grove, Ill.-based Angus Chemical in 1999, for a price that at the time was estimated to be $400 million. The focus on growth was keen for the next decade, but about six years ago Dow began operating the business in portfolio, said Lewis, meaning it had to share resources with other Dow segments and had less scope to maneuver independently of its parent.
Thats changed under Golden Gate Capital, which is privately held. The new owners are not here to operate Angus for cash, Lewis said. Theyre sticking with our leadership team, who have predominantly chemical industry experience, and they are adding resources in R&D, sales and support.
Golden Gate also permits the companys leaders more latitude when it comes to manufacturing and operations. We can look at inventory differently, for example, Lewis said. With the new products we are developing and introducing, and the markets improvement, we should see a spike in demand. But if youre totally optimized in your inventories and supply chain, you wont keep up when that spike comes.
We want to be ready to have the supply in place to support new product launches, and take advantage of any unforecast opportunities that arise. That means having manufacturing flexibility and some redundancy to cover production when growth happens.