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BASF says it'll form global unit in Jersey
Top exec looks ahead after Engelhard merger
Tuesday, June 13, 2006
BY JOSEPH R. PERONE
Star-Ledger Staff
German chemical company BASF plans to form a global catalyst division in New Jersey as it di gests its $5.6 billion acquisition of Iselin-based Engelhard, BASF executives said.
The lo cation of the headquarters will be at a yet-to-be-determined site, and the company will maintain research and development labs in the state, said Klaus Peter Lobbe, chief executive of BASF in Florham Park, the North American unit of the world's largest chemical company. The labs and Engelhard's former headquarters are in Iselin.
Wayne Smith will become president of the new BASF division. It will be the first time BASF has formed a division for automotive catalysts that scrub engine exhaust to remove harmful pollutants, Lobbe said.
Since 2004, Smith had been group vice president for the company's North American intermediates business, which makes more than 600 chemicals used to produce detergent, plastics, textiles, paints, coatings, medicine and crop protectants. Smith was recruited two years ago from competitor W.R. Grace.
The Engelhard name disap peared from Wall Street yesterday as the company's stock was delisted by the New York Stock Ex change. Engelhard fought BASF's hostile takeover attempt for more than five months before agreeing to a merger two weeks ago.
Lobbe said the company will cut some duplicative headquarters jobs, but he declined to provide a precise number. Engelhard has 650 employees at headquarters in Iselin and at sites in Union and East Newark. BASF employs 1,500 workers at headquarters in Florham Park and locations in Belvidere and Washington in Warren County. BASF also is acquiring the construction chemicals business of De gussa, which has an operation in Mine Hill.
Lobbe, 60, has spent four decades with BASF. He gave his first interview since the merger Friday after he and former Engelhard Chief Executive Barry Perry spoke to nearly 700 Engelhard employees during a meeting in East Brunswick:
How did the employees react to what you told them? We have some enthusiasm and excitement in the Engelhard crowd. But now comes the hard work. We have to make it happen. It is rather easy to sign the check on this decision and make Engel hard management happy. The more critical part is to integrate the Engelhard employees. Will you cut some jobs? Yes, some jobs. But I can't give you a number. There will be some cost synergies. But why make people nervous at this point in time, when we don't know how many? Definitely, in the administrative-function areas like information technology, fi nance, human resources, legal, lo gistics, purchasing and procurement, we will have some syner gies.
What will you change? We will have an operating di vision in New Jersey that is responsible for catalysts worldwide. This shows the attractiveness and the importance of this business for the BASF group. We didn't have any division before. Previously, our catalyst business was part of the chemicals divi sion. During the next two or three months, we will learn more about both sides and then we will decide on where the headquarters will be. One thing is sure, part of the Iselin organization is the R&D facility, and that will not change. Can you understand the employees' reticence about BASF because of the hostile takeover? All in all, we appreciate that the process is over now. Believe me, we didn't like that it turned into a hostile takeover. We meant from the beginning that it could be done in an amicable way. At the end of the day, we came to a friendly solution for the employees and for the business.
What are the synergies between the two companies? To give you one example, Engelhard is very strong in the automotive catalyst business. They have close links to the car manufacturers. We had a little, tiny catalyst business worldwide. Now, we added a big piece from Engelhard. BASF has long-standing links to the car manufactur ers, as well. We have coatings, plastics and gasoline additives. How will your pigments business change? We have a pigment business that is directed to textiles and to automotive. What we get here is more into cosmetics and personal-care. We get stronger by combining our portfolios because we are the better choice for the customer. Do you have a succession plan for the day that you decide to retire? The only clear signal for me to retire is when the candles get more expensive than the cake.
Joseph R. Perone may be reached at jperone@starledger.com or (973) 392-4262.
© 2006 The Star Ledger
© 2006 NJ.com All Rights Reserved.
BASF says it'll form global unit in Jersey
Top exec looks ahead after Engelhard merger
Tuesday, June 13, 2006
BY JOSEPH R. PERONE
Star-Ledger Staff
German chemical company BASF plans to form a global catalyst division in New Jersey as it di gests its $5.6 billion acquisition of Iselin-based Engelhard, BASF executives said.
The lo cation of the headquarters will be at a yet-to-be-determined site, and the company will maintain research and development labs in the state, said Klaus Peter Lobbe, chief executive of BASF in Florham Park, the North American unit of the world's largest chemical company. The labs and Engelhard's former headquarters are in Iselin.
Wayne Smith will become president of the new BASF division. It will be the first time BASF has formed a division for automotive catalysts that scrub engine exhaust to remove harmful pollutants, Lobbe said.
Since 2004, Smith had been group vice president for the company's North American intermediates business, which makes more than 600 chemicals used to produce detergent, plastics, textiles, paints, coatings, medicine and crop protectants. Smith was recruited two years ago from competitor W.R. Grace.
The Engelhard name disap peared from Wall Street yesterday as the company's stock was delisted by the New York Stock Ex change. Engelhard fought BASF's hostile takeover attempt for more than five months before agreeing to a merger two weeks ago.
Lobbe said the company will cut some duplicative headquarters jobs, but he declined to provide a precise number. Engelhard has 650 employees at headquarters in Iselin and at sites in Union and East Newark. BASF employs 1,500 workers at headquarters in Florham Park and locations in Belvidere and Washington in Warren County. BASF also is acquiring the construction chemicals business of De gussa, which has an operation in Mine Hill.
Lobbe, 60, has spent four decades with BASF. He gave his first interview since the merger Friday after he and former Engelhard Chief Executive Barry Perry spoke to nearly 700 Engelhard employees during a meeting in East Brunswick:
How did the employees react to what you told them? We have some enthusiasm and excitement in the Engelhard crowd. But now comes the hard work. We have to make it happen. It is rather easy to sign the check on this decision and make Engel hard management happy. The more critical part is to integrate the Engelhard employees. Will you cut some jobs? Yes, some jobs. But I can't give you a number. There will be some cost synergies. But why make people nervous at this point in time, when we don't know how many? Definitely, in the administrative-function areas like information technology, fi nance, human resources, legal, lo gistics, purchasing and procurement, we will have some syner gies.
What will you change? We will have an operating di vision in New Jersey that is responsible for catalysts worldwide. This shows the attractiveness and the importance of this business for the BASF group. We didn't have any division before. Previously, our catalyst business was part of the chemicals divi sion. During the next two or three months, we will learn more about both sides and then we will decide on where the headquarters will be. One thing is sure, part of the Iselin organization is the R&D facility, and that will not change. Can you understand the employees' reticence about BASF because of the hostile takeover? All in all, we appreciate that the process is over now. Believe me, we didn't like that it turned into a hostile takeover. We meant from the beginning that it could be done in an amicable way. At the end of the day, we came to a friendly solution for the employees and for the business.
What are the synergies between the two companies? To give you one example, Engelhard is very strong in the automotive catalyst business. They have close links to the car manufacturers. We had a little, tiny catalyst business worldwide. Now, we added a big piece from Engelhard. BASF has long-standing links to the car manufactur ers, as well. We have coatings, plastics and gasoline additives. How will your pigments business change? We have a pigment business that is directed to textiles and to automotive. What we get here is more into cosmetics and personal-care. We get stronger by combining our portfolios because we are the better choice for the customer. Do you have a succession plan for the day that you decide to retire? The only clear signal for me to retire is when the candles get more expensive than the cake.
Joseph R. Perone may be reached at jperone@starledger.com or (973) 392-4262.
© 2006 The Star Ledger
© 2006 NJ.com All Rights Reserved.
posted by Jones Lang LaSalle NJ News Blog at 12:07 PM
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