Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Tim Stenovic on Bloomberg Radio. Well, you know what, Maddie,
Speaker 1: we had some data are out earlier this morning. We
Speaker 1: talked about with Scarlett and Romain. It talks specifically about
Speaker 1: output at US factories up the most in January, by
Speaker 1: the largest amount in early a year. So we're talking
Speaker 1: about improving supply chains, firmer demand, getting and giving some relief,
Speaker 1: if you will, to what's been a really challenge manufacturing sector.
Speaker 1: So much needed relief after the past couple of years
Speaker 1: of supply chain shocks. Right, it's been crazy. Right, We're
Speaker 1: just talking a little bit about Cisco and the manufacturing
Speaker 1: and the and the backlogs just in general. We want
Speaker 1: to get to our next guest, cust Mattive Holdings is
Speaker 1: a publicly held UH company. It's got about a one
Speaker 1: and a half billion dollar market cap. It makes and
Speaker 1: sell special specialty materials for manufactory to customers in more
Speaker 1: than a hundred countries, so it's got a great global perspective.
Speaker 1: Julie Chartel is the presidency of the company. Just ringing
Speaker 1: the closing bell at the New York Stock Exchange and
Speaker 1: that's where we find our via zoom. Julie, good to
Speaker 1: have you here on Bloomberg Business Week on Bloomberg Radio.
Speaker 1: First of all, tell us a little bit about your customers,
Speaker 1: your business and what vantage point that gives you when
Speaker 1: it comes to manufacturing and the economic outlook. Sure, thank
Speaker 1: you for having me today. It's a real honor and
Speaker 1: privilege to be here at the New York Stock Exchange
Speaker 1: and it marks a key milestone formative as a specialty
Speaker 1: materials company, where you've created through the merger of two
Speaker 1: former specialty materials companies, Nina and SWM, and so combined,
Speaker 1: it's a really powerful statement that we're making into the market.
Speaker 1: We have complementary technologies that we sell into a diverse
Speaker 1: area of different categories, whether that's filtration media for cleaner
Speaker 1: air and water and the strong macro trends behind those things.
Speaker 1: It's release liners and applications for medical packing, packaging and
Speaker 1: its tapes and abrasives. Into the industrial space as well,
Speaker 1: we've seen great strength and really a supply chain that
Speaker 1: is starting to improve, and that's a great spot to
Speaker 1: be in as a manufacturer. How would you describe the
Speaker 1: overall manufacturing environment today? And what does that tell us
Speaker 1: about our overall economy. What's kind of an insight that
Speaker 1: you have because of your work in manufacturing that the
Speaker 1: rest of us might not. I think it's interesting because
Speaker 1: it's a little bit of a dichotomy. We are seeing,
Speaker 1: you know, the supply chain start to right size after
Speaker 1: what I would say is two years of challenges in
Speaker 1: our supply chain in manufacturing, whether that's driven by the
Speaker 1: rising interest rates, record levels of inflation, the Ukraine War,
Speaker 1: some of the conflicts in China, or some of the
Speaker 1: the outcomes of COVID and China. We're starting to see
Speaker 1: that settle in, and so our supply chain is opening
Speaker 1: up a bit, loosening up a bit, and that's really
Speaker 1: important for our customers. It means we're able to get
Speaker 1: back to a service level and predictability and lead time
Speaker 1: that is most valuable to them. And I think what
Speaker 1: we really recognize as manufacturers is it's important to have
Speaker 1: a global supply chain, but it's really important to have
Speaker 1: local supply because during this time, supply and availability became
Speaker 1: the number one prior already for all of our customers. Hey, Julie,
Speaker 1: two questions, So are you back? Are the supply chains
Speaker 1: back to where we were pre pandemic and all of
Speaker 1: the bottlenecks. And secondly, you talk about local supply chains,
Speaker 1: are we seeing more and more companies tap into that
Speaker 1: change their supply chains, make sure that they're kind of
Speaker 1: in their backyard. Um. So if you could address those
Speaker 1: two things, that would be great. Sure. On the supply chain,
Speaker 1: I'd say we're headed um and headed back to pre
Speaker 1: pandemic levels, but still not there. But we're seeing, you know,
Speaker 1: chemical availability become um more standardized or seeing lead times
Speaker 1: become more standardized. So the availability is really improving. We
Speaker 1: aren't seeing a tremendous amount of deflation yet, at least
Speaker 1: not in the categories in which we compete. We're seeing
Speaker 1: a start to moderate, but we still have prices at
Speaker 1: very high levels where most of our supplies um. And
Speaker 1: I will tell you that we're in the past. Maybe
Speaker 1: pricing was the number one discussion with customers. It is
Speaker 1: supply chain now. And so just as I was mentioning
Speaker 1: and to your question that local availability and there's different
Speaker 1: ways to do that, whether that's having manufacturing assets in
Speaker 1: the backyard of our customers in our markets, or having
Speaker 1: availability through different means of transportation and quick turn you know,
Speaker 1: an agile type of transportation system. It's significantly important because
Speaker 1: many customers and many suppliers and many manufacturers have learned
Speaker 1: how impactful it is when some of those materials that
Speaker 1: we did not anticipate. You know, you anticipate your big
Speaker 1: commodity materials to have fluctuations like we've seen. We did
Speaker 1: not anticipate specialty chemicals and some of the other areas
Speaker 1: to have the type of volatility that we've seen. That's
Speaker 1: starting to loosen up and straighten out a little bit,
Speaker 1: but the local supply chain, the reliability, the predictability continues
Speaker 1: to grow in importance with our customers. Have you felt
Speaker 1: any impact from China reopening? Has that impacted you at all?
Speaker 1: And do you anticipated impacting you? You know, very minimal um.
Speaker 1: We have a very small footprint in China and a
Speaker 1: very small portion of our revenue in China. We're primarily
Speaker 1: uh North American and European and a little bit in
Speaker 1: South America, a little bit in Asia, so it's had
Speaker 1: a very minimal impact I'd say, not significant all right
Speaker 1: to the US and Europe at your biggest market. UM
Speaker 1: recession for either of them or how would you describe
Speaker 1: it at this point, you Lee, I think they're very different.
Speaker 1: I mean, we're definitely feeling um some contraction. In Europe
Speaker 1: in particular, we saw and felt and experienced them, you know,
Speaker 1: record level energy hikes. We have facilities in France and Spain,
Speaker 1: the UK and Germany and we felt it in all
Speaker 1: of those areas. I will tell you what it's helped
Speaker 1: us do is become more agile. So we've worked really
Speaker 1: hard to start and forward by some of those energies,
Speaker 1: hedge some of that energy cost so that we have
Speaker 1: greater reliability and predictability, and it's made as very agile
Speaker 1: with our pricing um so that we have shorter pricing
Speaker 1: commitments and contracts and different modifiers that are inclusive of
Speaker 1: different components and some of those specialty chemicals and energy
Speaker 1: that had not been in the past. So that's your
Speaker 1: up and I'd say Europe is where we're feeling, you know,
Speaker 1: more of a slowdown. It's a little bit hard right
Speaker 1: now to peel away how much of that is really
Speaker 1: pure demand contraction and how much of that is just
Speaker 1: customers right sizing their inventory. Because we know throughout the
Speaker 1: entire supply chain. There was significant inventory build as customers
Speaker 1: struggle to get the materials they needed. They ordered more
Speaker 1: and more in anticipation of getting their fair share, and
Speaker 1: as demand starts to correct itself, you know, they're often
Speaker 1: left with high levels of inventories. So there's a level
Speaker 1: of de stocking and we're feeling that in North America
Speaker 1: and Europe, but more contraction in Europe. I'd say our
Speaker 1: North American business has remained fairly healthy. You know, I'm
Speaker 1: looking at there's a great function on the Bloomberg terminal.
Speaker 1: It's all about supply chains, and basically it looks at
Speaker 1: who are your top suppliers and then who are your
Speaker 1: top customers? UM. But when it comes to your suppliers,
Speaker 1: a lot of it is in the energy space. How
Speaker 1: would you describe that industry right now? The energy space,
Speaker 1: I think they're just going through a tremendous amount of
Speaker 1: change and I think there you know, it's difficult to
Speaker 1: predict um the future right now. There's a lot of
Speaker 1: pressure from getting to clean energy, and then there's the
Speaker 1: availability and you know, some of the efforts that we're
Speaker 1: seeing or the impacts that we're seeing in Europe with
Speaker 1: the Ukraine war and um, you know that created some
Speaker 1: of the issues that we saw earlier this year. So
Speaker 1: for us, it's really been about how do we control
Speaker 1: our own destiny. Knowing there's this there's lack of predictability
Speaker 1: in the marketplace and particularly an energy how do we
Speaker 1: make sure we become more agile, we become more consistent,
Speaker 1: and we really take control of those factors that we
Speaker 1: can to push forward through some of those issues and
Speaker 1: reduce the volatility. And are you still seeing consumer demand
Speaker 1: for sustainable manufacturing even with some of the volatility that
Speaker 1: we're experiencing. Yeah. Absolutely. I think sustainable manufacturing is it's
Speaker 1: not a it's not a friend. I think it's here
Speaker 1: to stay, and so it's really important that we continue
Speaker 1: to move in that direction. And much of our platform
Speaker 1: from an innovation standpoint is on sustainability. We're often the
Speaker 1: preferred alternative to plastics for some of our packaging material
Speaker 1: and medical packaging materials, so it's a really important part
Speaker 1: of how we move forward. Hey, Julie, twenty seconds, what
Speaker 1: keeps you up at night? What's the biggest risk in
Speaker 1: the outlook? Very quickly if you could, you know, it's
Speaker 1: just the overall global economy, the factors were moving in
Speaker 1: the indicators are moving in different directions. When we look
Speaker 1: at interest rates versus job rates versus manufacturing p m I,
Speaker 1: typically they've moved in unison and they just they're not
Speaker 1: quite doing that right now. So it's the lack of predictability.
Speaker 1: That's why for us, it's really important we focus on
Speaker 1: those things we can control. We just merge. We have
Speaker 1: great synergies, we have great scale, we have great cost
Speaker 1: reduction opportunities as well as unlocking growth. So I'm thrilled
Speaker 1: with where we're headed, and we're going to focus on
Speaker 1: those things that we can control. Well, get great to
Speaker 1: get a check on your business and talk outlook as well.
Speaker 1: Julie Schutel, she is president CEO of Mattive. She just
Speaker 1: ring the closing belt of New York Stock Exchange and
Speaker 1: that is exactly where we were just talking to her,
Speaker 1: so good to catch up with her.