By Mike Ott, Chairman, SOCMA Board of Governors & President, Polysciences, Inc.
As the world continues its emergence and recovery from a pandemic and an uncertain landscape in 2021, our unique community of specialty chemical manufacturers pursue innovation to address challenges with an attitude that they can do and make anything, no matter the politics or business climate. We adjust and constantly adapt, finding ways to create products our customers need to help society move forward.
My specialty chemical colleagues and I are making very high-grade, value-added products that go into almost everything people use within their daily lives. I often hear my peers talk about the challenges this poses. Of course, it’s a challenge! But that’s just part of waking up every day. Making these new products, the opportunities to innovate and to see your products in finished form being accepted in industry is exhilarating. It’s what drives us!
I am proud to say the specialty chemical industry is playing a significant role in the global pandemic recovery. My company, Polysciences, Inc., makes the components for diagnostic tests, which are in high demand for determining disease states and even specific strains of the COVID virus. We also make transfection reagents for RNA and DNA that enable researchers to alter biological conditions. This technology has driven the drug industry into new directions since the pandemic hit. I always say that out of something bad always comes something good.
In addition, many of my colleagues are making active pharmaceutical ingredients, as well as components of other supplies vital to the pandemic recovery, which makes all of us extremely satisfied and excited to be a part of this community of companies.
As I reflect on how far we’ve come over the course of the past 100 years, here are just a few key transformations I have witnessed over my career:
Having been in the specialties sector for almost 40 years, the industry is much more regulated today than when I first started. But I have always viewed regulatory compliance as a competitive advantage for my business. Some regulatory efforts stop innovation, and we should all work to educate and show the value of continuous improvement. While there are advantages to regulation, it also makes it harder for an entrepreneur to start up a company today than it did 40 years ago. That stifles innovation because it’s in those start-up companies and labs at universities where inventions or new products emerge.
In 2021, I also see a greater need for custom-made chemicals, not due to just growth in demand, but also because larger companies don’t want to allocate capital for small volume production. They are willing to invest in their main products, but there is a growing demand for smaller-volume, high-value batch products. Larger companies are looking for reliable business partners to produce the products that are a smaller part of their overall business but are a vital part of their business.
Innovation playing a role in transformation
Analytical equipment has been a big transformation across the industry. Forty years ago, we could measure parts per million, but now it’s routine to measure down to parts per billion or even trillion accurately. With this advancement in technology comes more regulation.
But it also leads to opportunity. Smaller companies have innovated around this ability to measure in such minute quantities. Those that have acquired the equipment and produce products that have non-detectable levels of certain chemicals can charge a lot for that capability.
Being able to sense all kinds of materials going through pipes, reactors and final product vessels has also helped reduce process times and improved companies’ abilities to become more efficient.
I bought my company in 1993, and by 1994 I wanted to be the first to establish a website because I felt that would be perceived as technologically competitive. I was of the mindset that if you don’t have a website, you could be perceived as not being a serious business.
Now, websites are very interactive, with full catalogues of products. Today, in real time, my subsidiary in Germany can view and search the inventory of another company site in another part of the world to determine the availability of a product, and then take it out of the inventory from their location. It is incredible the functionality that’s been added.
With all the logistics challenges the industry currently faces, shipping is always an issue. The ability to track shipping has been a major contribution to business growth. In the 1980s, you put boxes on trucks and hoped they arrived at their destinations. Now, you can track a package at every location along its route. This is especially important when shipping hazardous materials as you want to know where your products are at all times.
Our ability to actually manufacture products, not just the buying and selling of materials is of great value. Combining materials, running reactors, testing product performance and showing the data is what specialty chemical manufacturers do.
The uniqueness of the products we create is critical to industry growth.
Trade association value
Trade associations are also vital to industry growth. I firmly believe SOCMA is the premiere trade association for the specialties sector. When the pandemic hit in March 2020, SOCMA immediately recognized the need for our industry members to talk to one another, share best practices when it came to mask mandates, social distancing guidelines and other protocols to aid us in navigating the pandemic. Their team put together town halls, business webinars and discussion forums to help us work through these guidelines together.
SOCMA also continues to help the industry connect with business partners through the Lead Sheet service, which as particularly impactful when our companies could not meet face-to-face to conduct business or attend trade shows during the pandemic.
One-on-one regulatory assistance is also a key value-add SOCMA provides our members and the industry. SOCMA can call up EPA, OSHA or FDA and get answers directly from the source. Their team then relays this critical information back to our members.
The original reason I joined SOCMA was ChemStewards – the environmental, health and safety (EHS} management program. My niche of the industry is regulated by FDA, but ChemStewards not only provides a list of things we need to do to stay EHS compliant, but delivers personalized, hands-on guidance. With the program’s core principles, audits and awards program, ChemStewards is not just a pat on the back, or checklist of needed corrections, it has teeth and provides a lot of value to small batch manufacturers.
There’s also ChemOps Training. The training program’s interactive animation makes it more effective. The operators are not just reading from a piece of paper, they are seeing animations that allow them to learn and apply new concepts to their jobs in our facilities, which improves safety.
The future of specialties
With 2021 soon coming to a close, the specialty chemical sector remains strong, and it has a bright future. I believe moving forward there will be more controls on the process and handling of materials, and more regulations and equipment required for us to manufacture our products. In this environment, entrepreneurial innovation will lead the way into the future.
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