How has Charlotte Chemical performed recently, and what is your current strategy?

We have continued growing during 2022; not like in 2021, when growth was spectacular, but still double-digit growth (15%). This is excellent considering that prices have been going down recently, so we need to sell more tonnage than last year to maintain good numbers. Today, we have five flagship products, and we have a strategy to continue expanding market share in those. During the pandemic, we learnt that a crisis can be an opportunity. Suppliers stopped providing credit and had tight supply of product, so we decided to invest in increasing our inventories, and that meant we had much better product availability than our competitors. This has helped increase our clients’ loyalty to Charlotte Chemical.

After a price spike caused by the Ukraine war, prices dropped due to lower demand for chemicals. Indeed, the industry in general is slowing down: there is more product available, and that is pushing prices down. We are facing new challenges every year, and this year, we need to maintain prices competitive in spite of everyday changes. Thus, one of our strategies is to closely monitor market prices and future trends based on several factors such as weather, natural phenomena around the world, geopolitical situations, and other topics that changes prices and availability.

Have you been directly impacted by the Ukraine war?

As a specialty chemicals company, we do not move huge volumes, so we are less exposed to logistics issues than other chemical players. Also, the global situation is better than two years ago, when we had major supply chain disruptions. This said, logistics costs continue to be high to the point that sometimes the shipping is as expensive as the product.

Which industry segments are demonstrating the most resilience in the face of a potential global recession?

The market has been slow in general, but the automotive industry has continued growing. Due to the supply chain issues over the last two years, automotive production in Mexico and the USA has increased, helping our artificial leather business. Besides, we are facing a new regional priority; that means that producers in a region rather look for a supplier in their region, to minimize logistic risks and have what they need whenever they need it.

We have a potential recession in Europe and the USA and we need to be prepared for that. We need to improve our cost structure and efficiency. To that end, we have been improving our IT systems with ERP implementation.

As a specialty chemicals player, how important is it to have long-term relationships with clients?

We focus on forging alliances with our clients and we regularly communicate with them about how we can better serve their needs. For example, we build tanks or silos at customer´s facilities, which is a win-win solution. It significantly reduces logistics costs, thereby improving prices for the client, and it is also more sustainable because we can use fewer drums and do less trips. Besides, this gives you a win-win long term relation with customers.

How are your products becoming more environmentally friendly?

The transition towards eco-friendly products is driven by both regulation and cultural change. These days, nobody dares to ask for a straw when ordering a drink. In this context, we need to keep up to date with new product developments in the market: products that are more sustainable, that emit less VOCs and that are more environmentally friendly. In the plasticizers industry, for example, there have been many new developments including silver-based biocides, which expand the plastics life cycle from 10 years to up to 30 years. A longer product life means a lower product use, and hence is more sustainabie. Using less drums and sacs is another way of decreasing carbon footprint, and that is one of the reasons to work with our clients for better and cleaner ways of delivering the products to them.

On 2023 Charlotte Chemical will celebrate our first 35 years in the market. This will be a good opportunity to think on all milestones we have passed, but more important, to start building our future for the years to come.