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November 22, 2016

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Ashland grows by winning new territory

THE first time I knew about Ashland was two years ago when I was an intern at a financial magazine which happened to be located in the same office building as the US-based chemical company. At that time Ashland took the second floor.

When I revisited the building on October 26, Ashland has doubled its size to also occupy the first floor, which has been transformed into its laboratory.

Space expansion should be the easiest, but compelling, way to say that the entity is doing well in China. However as I dug for more information about this company, I found that it is now winning new territory in China rapidly as a specialty chemicals producer, expanding more than just doubling its office space.

Health care and food ingredients provider

On my visit, I found that Ashland’s food and beverage research center in Shanghai expanded with the opening of its laboratory equipped with advanced analytical instruments and a pilot system to emulate food production procedures. Just a day earlier, the company opened a pharmaceutical site in Nanjing, containing quality control systems so that it would strictly follow and sometimes exceed the medicinal requirements in China.

The company is “ready to assist the food and health care industries in China, and the Asia market at large,” William A. Wulfsohn, its chairman and chief executive officer, said. “We are expanding and attracting talents locally to provide solutions most suitable to Chinese consumers.”

Although Ashland has long been ranked in the Fortune 500 and has a history of more than 90 years, it entered China as feisty beginner with huge ambitions. During the past eight years after setting up its regional headquarters’ office in Shanghai in 2008, Ashland has already added two production sites and two research centers, employing a total of 650 employees.

In its latest financial report covering from July to September, the company reaped US$754 million on specialty chemicals where Asia contributed to nearly 17 percent, “China is the main market,” Wulfsohn said.

The food, beverage and pharmaceutical markets in China are presenting an enormous scale for relevant chemicals providers to participate in. Over the first nine months food and beverage companies generated a revenue of 306.8 billion yuan (US$45.3 billion), 2 percent higher from a year ago. The pharmaceutical market, on the other hand, is growing 7.3 percent annually on sales in China, which are expected to hit 1.5 trillion yuan this year, according to a recent report of Sinohealth Intelligence, a domestic pharmaceutical consulting firm.

Ashland, the world’s leading specialty chemicals producer which dominates North America — its home market — with a market share of 66.3 percent on food and beverages hydrocolloids applications, is now eying China to exploit better its superiorities. In China where safety in dairy products warrants the highest attention, Ashland now introduces an Ultra High Temperature system and a homogenizer to simulate milk production “so that we can ensure the great taste while perfecting safety on the dairy production in which our additives are added,” said David Neuberger, its vice president of pharmaceutical, nutrition and agricultural specialties sectors.

Meanwhile in the Nanjing pharma site, Ashland puts emphasis on medicinal quality. The site is now producing excipients — to solve common formulation problems.

To ensure the products fit the quality standards in China, the site is equipped with a quality control system that monitors production in real time.

“Always solving”

Ashland now has a new brand strategy and image that is based on global market research with customers and prospects. The last time I saw the company, its logo was formed by the brand name printed in red — fairly common with many other brands. It recently impressed me with a logo of a triangle pattern followed by a slogan that says: always solving.

The triangle contains three circles connected by gray lines that represent molecules. The colors of the molecules, according to Wulfsohn, stand for nature representing the sky, rivers and forests, and are connected with the land we live on, which in the logo is symbolized by the lines. The molecules are not fully connected because they connote the process that Ashland goes through to put molecules together and take them apart to form specialized solutions that answer their customers’ greatest challenges.

Specialty chemicals producers are always those at the frontier to find the potential needs of consumers and evoke them with wonderful solutions. The hair sprays add to the allure to perfect our appearance while protecting the hair, the adhesives used in automobiles nowadays seek ways even to lower noise apart from connecting car parts — they are developed by these companies to provide better solutions to our daily life.

Ashland stood out among them. Echoing the logo it sets the mission to “always solve” problems on improving people’s daily life, providing environmentally friendly solutions so that people live in harmony with the nature.

“Always solving” now guides its operations, which means “we care about every detail of the products related to people’s life, and we have a tenacious team of more than 6,000 global employees, with more than 1,500 researchers and scientists to realize them by working closely with local customers,” Wulfsohn said.

In fact just several months ago Ashland was still known as a chemical giant — even though is focuses on specialty chemicals — mainly because it contained Valvoline, which is America’s second-largest operator of oil-change stores.

Despite Valvoline taking up a large part of the group’s profit, “we are creating two great companies, new Ashland and Valvoline,” Wulfsohn said.

In Ashland’s new mentality, to be a specialty chemicals producer they should stick to discovering out new products to enhance people’s life, rather than being a transporter to convey lubricants everywhere in the world.

According to Wulfsohn, more than half of its products sold in the Chinese market are new ingredients for consumer applications it developed during the past two years. Apart from food and health care applications, the products also cover special materials such as adhesives, paints and construction materials, serving the market with a diversified portfolio.

“It is the testament of our dedication to the mission,” Wulfsohn said.

Deeper engagement

Tracing back to two years ago, I often saw tens of engineers of Ashland hanging out, talking about daily life and also sharing which cities to go for ongoing projects.

The trifle details in fact mirror exactly how they work to boost the growth of this company.

Lu Zhenju, an engineer I recently met there, told me that he just hopped into Ashland from another US-based chemical giant.

“That’s not because I got promoted here or paid higher salary,” Lu said. “But Ashland provides a broader space for my development and for me to truly be a solver, as I can participate in or develop projects independently, traveling around the country or even the world to know what our customers and consumers want.”

The rights Ashland confer to its staff might just be a part of its culture. However, it “drives my motivation, that is to be more engaged in the market we are developing, to provide more suitable solutions to local consumers. At Ashland, I’m always solving.” Lu said.


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