Christian Kohlpaintner has been the Chief Executive Officer of Brenntag SE since the beginning of 2020. He has many years’ international management experience in the chemical industry and during the course of his career has worked with many different people of different nationalities and cultures not only in Germany, but also in the USA, Switzerland and China.
CHRISTIAN KOHLPAINTNER I already knew the company quite well from the collaboration with my former employers in the chemical industry and came to Brenntag with the vision of exploiting the enormous potential that we have and of which I am firmly convinced. That is precisely what we started to do in January 2020. By launching “Project Brenntag”, we have initiated one of the most comprehensive transformations in our company’s history – despite the COVID-19 pandemic, which has made circumstances much more difficult. We have made very good progress on our transformation thanks to our highly motivated team at Brenntag, who from the outset have been fully committed to undertaking this exciting journey with me. Despite the coronavirus crisis, we also managed to achieve perfectly respectable financial results in 2020. In that respect, we can be satisfied with last year and also a little bit proud.
CK Brenntag is the global leader in chemical distribution and a very successful company with a history stretching back almost 150 years. What is more, Brenntag has an extremely robust business model, which is something we see again and again, especially in times of crisis. In recent years, however, the company has fallen short of both its own expectations and those of our stakeholders, especially with regard to organic earnings growth. But Brenntag has this enormous potential. I am talking primarily about the unrivalled breadth of our product portfolio, our global site network and the huge pool of talent at Brenntag. That is why we took a very close look at the company and initiated numerous changes with a view to better leveraging our strengths. Our competitors are not asleep. If Brenntag wants to continue to fulfil its role as global market leader and not just maintain, but further expand this position, the company needs to change.
CK When I started as CEO at the beginning of 2020, we as the team initiated an extensive, holistic analysis of the entire Group and realized that we need to position ourselves better in various areas. We do not need to change everything, of course, as we are already quite successful and can build on strong foundations. But it is our duty and our aim to make the Group fit for the future. We understand change at Brenntag to mean many different things. We are dealing with new issues that have become important during the COVID-19 crisis. In the course of “Project Brenntag”, we have also identified further aspects where we want to change. And there are, of course, areas on which we work continuously and over the long term anyway.
CK Let me begin with our donation initiatives. While swiftly and almost seamlessly adapting to the new situation in the COVID-19 crisis and safeguarding the health and safety of our employees, we also took immediate action to fulfil our responsibility to society. I am particularly pleased that by donating a number of our products, we were able to provide a little bit of help to people in many countries around the world. Secondly, we are working on the measures that we decided upon on “Project Brenntag”. On the financial front, we operated a prudent system of margin management and also achieved a clear improvement in our working capital turnover – which is precisely one of our focal points on “Project Brenntag”.
“Project Brenntag” also involves a change of culture. Through the programme, we aim to raise the level of ambition of our managers and open up good development opportunities for our dedicated employees. We have established clear areas of responsibility and accountability. A change of management culture cannot, of course, be implemented over night. But we are already addressing this by clearly aligning the performance-related remuneration for senior management with the objectives of “Project Brenntag”.
CK Well, that most certainly includes safety! For us as a chemical distributor, safety always takes top priority. Here too, we were able to record a success in 2020, as we reported an LTIR* of 1.4, our lowest Group accident rate to date. And I would also like to mention digitalization. This broad topic also affects us at Brenntag and will become ever more important over the long term, just as it will for many other companies. We have already taken some important steps here: we have been operating our DigiB unit for several years now and are working on various concepts. In this case too, our customers’ requirements are front and centre and it is partly about harmonizing processes worldwide. For example, we have set up a professional platform for customer communications and continuously developed our digital distribution channel “BrenntagConnect”.
* LTIR (Lost Time Injury Rate) – number of industrial accidents resulting in at least one day’s absence from work per one million working hours.
CK Both our sector, chemical distribution, and the chemical industry generally are continuously changing, in some cases substantially – and in a relatively short period of time. Of course, this means that the requirements of our business partners – customers and suppliers – are also changing and, quite justifiably, becoming ever more demanding. More and more, our customers see us as a contact on the practical application of chemicals and ingredients and value our technological expertise. Chemical distribution is now about much more than transporting standard chemicals from one place to another.
We need to respond to all these changes. Reflecting our self-image, we want to play a part in shaping the future of our sector. And we can do that because we are acting from a position of strength. We are already the world’s largest chemical distributor. The task now, though, is to systematically develop Brenntag further. Last year, we developed “Project Brenntag” in detail in cooperation with a broad base of managers and employees. The focus in 2021 is now entirely on developing the concepts and measures in further detail and taking gradual steps to implement them carefully, but above all systematically. The measures will help us to address our partners’ requirements in a more targeted manner and deepen our relationships with customers and suppliers.
CK On “Project Brenntag”, we have invariably had the needs of our partners and the requirements of the market in mind. The project addresses our stakeholders very broadly and affects entirely different areas of our company. The biggest change is certainly the shift from a regional management structure to two global divisions: Brenntag Essentials and Brenntag Specialties.
Brenntag Essentials combines many of the strengths that Brenntag is already known for today. This division markets a broad portfolio of process chemicals for a wide variety of industries. It will stand out by virtue of its high efficiency and global reach while at the same time maintaining a strong local focus. In Brenntag Specialties, our teams focus not only on selling ingredients and chemicals but also on value-added services so as to be able to provide tailored solutions to better address the needs of our customers in the newly defined focus industries. Both divisions are represented by a specialist, focused sales organization and a first-class customer service team.
For the first time, we have also reviewed our global site network in detail. Here too, there are numerous opportunities to improve our footprint while at the same time maintaining our international profile and our high service levels. We will also make large investments in our network in order to modernize our sites and be able to serve our customers even more efficiently. And not least of all, we are streamlining our administrative processes.
CK “Project Brenntag” is a multi-year programme to transform and further develop our already-successful Group. We will have achieved the full potential from “Project Brenntag” in 2023. Some measures will take more time, whereas we expect others to yield visible results as soon as 2021. The crucial point is this: it is about strengthening our competitive position and expanding Brenntag’s position as global market leader. The primary objective of “Project Brenntag” is to return our company to sustainable organic earnings growth.