Hubbard-Hall Ready for Challenge
Hubbard-Hall Ready for Challenge
written by: Joseph Chang; ICIS
US-based chemicals distributor Hubbard-Hall is ready to meet the challenges of a long US economic recovery coming out of the Covid-19 crisis, its CEO said.
“Looking ahead, we’re in for a long, slow recovery. In the industrial and durable goods market, we haven’t felt the bottom yet,” said Molly Kellogg, president and CEO of Hubbard-Hall.
Tracking its sales versus the American Chemistry Council’s (ACC) Chemical Activity Barometer (CAB), the company’s sales performance tends to trail the leading indicator by about six months, she said.
The ACC’s unadjusted CAB for May showed a much smaller 0.3% decline following a 6.3% drop in April and an 8.9% decline in March.
Hubbard-Hall, a 6th generation family-owned chemical distributor founded in 1849, specialises in metal surface treatment chemicals, including cleaning and finishing, as well as electronic and wastewater treatment chemicals. The business generated sales of $55.5m in 2019.
During the early phase of the global Covid-19 crisis where supply chain disruptions related to China were widespread, the company was able to meet customer needs with its long-term relationships with mainly domestic suppliers.
“One strength is that we are about 80% domestically sourced and have long-term strategic relationships. So when products are tight, we are able to lean into those relationships,” said Kellogg.
“On the customer side, March was the chemical equivalent of the toilet paper panic but we had no shortages. Since then, things have slowed,” she added.
For much of its international sourcing, the company makes use of its membership in the Omni-Chem alliance, a network of independent chemical distributors.
Hubbard-Hall is seeing strength and resilience in the electronics and medical devices sectors, but automotive and aerospace will continue to be challenging as customers further down the chain work off inventories, she noted.
“It’s going to be a big sinkhole for a while as demand seesaws. I don’t see a meaningful recovery this calendar year,” said Kellogg.
DIGITAL TRANSFORMATION
In the meantime, Hubbard-Hall is focusing on improving its digital capabilities to enable a better customer experience.
“We had a three-year digital transformation plan that we implemented in about three weeks. We accelerated this change internally,” said Kellogg.
“Customers want an effortless experience and quick answers. The days of the salesperson being the sole source of information and controlling the relationship are gone,” she added.
Connecting customers to the right people – for example, a technical team – the first time, speed of response and being adaptable are key elements to success, the CEO noted.
Customer usage of Hubbard-Hall’s digital portal has jumped during the Covid-19 crisis. With around 90% of sales being repeat business, it’s important for customers to be able to quickly connect into a portal where they can also track orders all the way through delivery, she said.
“Of course, with digital comes the risk of disintermediation, so we must be clear and double down on our value proposition, our expertise,” said Kellogg.
While large distributors get larger through consolidation, they often lack the flexibility of smaller distributors, she noted.
“During the pandemic, we are proving our value – flexing instantly to customer needs and never missing an order. For manufacturers looking for value-add to their process, we have a lot to offer,” said Kellogg.
Hubbard-Hall has invested in more technical staff – chemical and applications engineers – to help customers with solutions in metal surface treatment and cleaning.
M&A OPPORTUNITIES
Even through this challenging business environment, Hubbard-Hall is seeking acquisition opportunities.
“We are very interested in acquiring and have cash set aside. We are looking at specialty chemicals companies in our markets or complementary markets,” said Kellogg.
“Also as business changes with the prevalence of digital, how do we add technology to our suite of products? We may look for a small equipment or technology company that helps us help our customers,” she added.
Technology will also play heavily in capital spending decisions. For example, if new tanks are installed, they would be automated to track inventory and enable other functions.
Hubbard-Hall has a tank farm, warehouse and manufacturing capabilities at its headquarters in Waterbury, Connecticut, a warehouse in Wilmington, Massachusetts in the greater Boston area, and a metals surface treatment chemicals manufacturing plant in Inman, South Carolina.
Kellogg attributes the company’s longevity across six generations through wars and pandemics on being an independent, flexible and adaptable company with a strong financial position.
“We run a good business and can get through tough times with the right strategy and value proposition for our customers,” said Kellogg.
July 14, 2020
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Excerpt: CEO Molly Kellogg is preparing the chemical distributor for a long, slow recovery. Enhancing digital and technical capabilities will be key to success.
Full Text: written by: Joseph Chang; ICIS
US-based chemicals distributor Hubbard-Hall is ready to meet the challenges of a long US economic recovery coming out of the Covid-19 crisis, its CEO said.
“Looking ahead, we’re in for a long, slow recovery. In the industrial and durable goods market, we haven’t felt the bottom yet,” said Molly Kellogg, president and CEO of Hubbard-Hall.
Tracking its sales versus the American Chemistry Council’s (ACC) Chemical Activity Barometer (CAB), the company’s sales performance tends to trail the leading indicator by about six months, she said.
The ACC’s unadjusted CAB for May showed a much smaller 0.3% decline following a 6.3% drop in April and an 8.9% decline in March.
Hubbard-Hall, a 6th generation family-owned chemical distributor founded in 1849, specialises in metal surface treatment chemicals, including cleaning and finishing, as well as electronic and wastewater treatment chemicals. The business generated sales of $55.5m in 2019.
During the early phase of the global Covid-19 crisis where supply chain disruptions related to China were widespread, the company was able to meet customer needs with its long-term relationships with mainly domestic suppliers.
“One strength is that we are about 80% domestically sourced and have long-term strategic relationships. So when products are tight, we are able to lean into those relationships,” said Kellogg.
“On the customer side, March was the chemical equivalent of the toilet paper panic but we had no shortages. Since then, things have slowed,” she added.
For much of its international sourcing, the company makes use of its membership in the Omni-Chem alliance, a network of independent chemical distributors.
Hubbard-Hall is seeing strength and resilience in the electronics and medical devices sectors, but automotive and aerospace will continue to be challenging as customers further down the chain work off inventories, she noted.
“It’s going to be a big sinkhole for a while as demand seesaws. I don’t see a meaningful recovery this calendar year,” said Kellogg.
DIGITAL TRANSFORMATION
In the meantime, Hubbard-Hall is focusing on improving its digital capabilities to enable a better customer experience.
“We had a three-year digital transformation plan that we implemented in about three weeks. We accelerated this change internally,” said Kellogg.
“Customers want an effortless experience and quick answers. The days of the salesperson being the sole source of information and controlling the relationship are gone,” she added.
Connecting customers to the right people – for example, a technical team – the first time, speed of response and being adaptable are key elements to success, the CEO noted.
Customer usage of Hubbard-Hall’s digital portal has jumped during the Covid-19 crisis. With around 90% of sales being repeat business, it’s important for customers to be able to quickly connect into a portal where they can also track orders all the way through delivery, she said.
“Of course, with digital comes the risk of disintermediation, so we must be clear and double down on our value proposition, our expertise,” said Kellogg.
While large distributors get larger through consolidation, they often lack the flexibility of smaller distributors, she noted.
“During the pandemic, we are proving our value – flexing instantly to customer needs and never missing an order. For manufacturers looking for value-add to their process, we have a lot to offer,” said Kellogg.
Hubbard-Hall has invested in more technical staff – chemical and applications engineers – to help customers with solutions in metal surface treatment and cleaning.
M&A OPPORTUNITIES
Even through this challenging business environment, Hubbard-Hall is seeking acquisition opportunities.
“We are very interested in acquiring and have cash set aside. We are looking at specialty chemicals companies in our markets or complementary markets,” said Kellogg.
“Also as business changes with the prevalence of digital, how do we add technology to our suite of products? We may look for a small equipment or technology company that helps us help our customers,” she added.
Technology will also play heavily in capital spending decisions. For example, if new tanks are installed, they would be automated to track inventory and enable other functions.
Hubbard-Hall has a tank farm, warehouse and manufacturing capabilities at its headquarters in Waterbury, Connecticut, a warehouse in Wilmington, Massachusetts in the greater Boston area, and a metals surface treatment chemicals manufacturing plant in Inman, South Carolina.
Kellogg attributes the company’s longevity across six generations through wars and pandemics on being an independent, flexible and adaptable company with a strong financial position.
“We run a good business and can get through tough times with the right strategy and value proposition for our customers,” said Kellogg.
July 14, 2020
