"An advantage of the Organo Síntesis acquisition is that it gives us a platform for further organic and inorganic growth in Latin America, as it is Pilot’s first production asset outside the U.S."
What has been Pilot’s performance in the last year, and what is your forecast for demand moving forward?
Pilot Chemical Company’s top line results have grown double digits versus the prior year. Demand has remained strong across all business lines and geographies, however, there have been headwinds in terms of cost increases and supply chain disruptions. We have been able to navigate these through close collaboration with our customers and supply chain partners, however, and we have successfully offset the cost increases with pricing action.
Looking forward, we have a strong order book, but our indicators point to the market demand softening over the 2022 and into 2023. In particular we expect softening in LATAM, given the currency challenges in Argentina.
How has Pilot progressed in the Mexican market since acquiring Órgano Síntesis in 2019?
The Órgano Síntesis acquisition has strengthened our position in the biocide market in two ways. Firstly, it provided an increase in industrial production capacity for our ammonium quaternaries – the quat products Pilot Chemical subsidiary Mason Chemical Company markets under the Mason and Maquat brands throughout the Americas. Secondly, it also brought us new capabilities we did not have before, specifically with regards to cGMP manufacturing capability. This capability has allowed Pilot Chemical to supply a number of new products, such as benzalkonium chloride, benzethonium chloride, and chlorphenesin (Enhansys CPH preservative). These products are used in hygiene, sanitization, and personal care applications throughout the world, and allow us to expand the reach of our biocide business. Another advantage of the acquisition is that it gives us a platform for further organic and inorganic growth in LATAM, as Órgano Síntesis is Pilot’s first production asset outside of the US.
Why do you think many chemical companies are moving towards the specialties space, and what distinguishes Pilot in this segment?
In the specialties space you need to understand your customers’ unmet needs and how to solve them efficiently and effectively. There are three main things that differentiate Pilot Chemical as a diverse specialty chemicals company – our technology; our solutions; and our people. In terms of technology, Pilot Chemical was founded with the invention of ice-cold sulfonation, a technology which allows us to make surfactants at much lower temperatures without generating impurities, thus producing high-purity products that can be used in various applications.
In terms of our solutions for customers, Pilot’s Aspire line of super-concentrated surfactants is a good example. It addresses the current customer trend toward sustainable products, enabling our customers to formulate cleaning products with significantly less water use while still maintaining very strong cleaning performance. Lastly, Pilot Chemical has an extraordinary team of people who deliver outstanding service, which forms the backbone of a quick-and-nimble organization that reacts with speed to changing market dynamics and customer needs.
Pilot Chemical celebrates its 70th anniversary in 2022. How does the company intend to build upon this experience to increase its market share in Latin America in the years ahead?
There are three key growth areas for Pilot Chemical moving forward. We will continue to invest in our capabilities of our core businesses, namely surfactants, biocides and the Aristonate and additives product lines. Órgano Síntesis remains an important enabler and platform for our biocides growth, both for LATAM and for exporting to other regions. The second key lever for growth will be innovative, new products. For example, as part of our commitment to sustainability, Pilot Chemical has an exciting new exclusive partnership with Integrity Bio-Chemicals to bring new biosurfactants to the HI&I market in North America under the CalNext brand. CalNext biosurfactants are high-performing and biobased, providing customers with a new sustainable nonionic surfactant alternative. Finally, the third growth lever is M&A and partnerships, as we see inorganic growth as an integral part of the company's strategy.