WEBVTT - Mark Vergnano on Chemours (Audio)

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<v Speaker 1>You're listening to Taking Stock on Bluebird Radio. In July

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<v Speaker 1>of twenty fifteen that Kemore's a Company or KEM Wres

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<v Speaker 1>was spun off from DuPont and here to tell us

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<v Speaker 1>more about the company and its business is Mark Vergnano.

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<v Speaker 1>He is the chief executive of KEM Wars. Thanks very

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<v Speaker 1>much for coming into the studio. Great to be here.

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<v Speaker 1>Let's talk, or rather you talk and you describe the

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<v Speaker 1>three main business lines at KEM war so people understand

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<v Speaker 1>what it is the company is focused on. Well, as

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<v Speaker 1>you said, you know, we spun out last July from

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<v Speaker 1>DuPont and what we like to tell people is where

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<v Speaker 1>we're a startup, but we sort of had a two

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<v Speaker 1>hundred year head started from that standpoint. So you know,

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<v Speaker 1>three product lines that came outside of UH came out

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<v Speaker 1>of DuPont. One was our TiO two business, titanium dioxide

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<v Speaker 1>used in paints, plastics, even used in your toothpaste in

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<v Speaker 1>the morning, anything to make white. Um are floor products business,

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<v Speaker 1>which is both the polymer side Teflon as a brand

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<v Speaker 1>that many people know, as well as our refrigerants free

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<v Speaker 1>On what might be a refrigerant many people remember, but

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<v Speaker 1>our brand new refrigerant optition which has low global warming

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<v Speaker 1>potential UM. And we have a chemical solutions business, which

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<v Speaker 1>UH really is about mining chemicals primarily. Is the is

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<v Speaker 1>the third leg of our business. I just want to

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<v Speaker 1>touch on the fact. First of all, your background. You're

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<v Speaker 1>a real chemist, aren't you? Chemical engineer? Well? There you go,

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<v Speaker 1>But so what was what was your kind of path

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<v Speaker 1>from being a chemical engineer to now running this very

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<v Speaker 1>exciting CEO slash startup. Yeah, so I I came out

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<v Speaker 1>of the University of Connecticut and not that far away

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<v Speaker 1>UH and came into DuPont thirty five years ago and

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<v Speaker 1>UH started right away there, ended up getting my MBA

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<v Speaker 1>while I was there, but progressively just took different roles

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<v Speaker 1>in different jobs. Started in the lab, started doing a

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<v Speaker 1>process development, and then eventually running business. Does it help

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<v Speaker 1>to be someone with a real chemical background to run

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<v Speaker 1>a company like this, I think well. I always would

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<v Speaker 1>always tell people it's great to have an engineering background

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<v Speaker 1>just from a logic flow, you know, you you sort

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<v Speaker 1>of think of things logically. I think it helps. But

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<v Speaker 1>a company like DuPont and now a company like Comor's

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<v Speaker 1>chemistry is really what we are right, We are a

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<v Speaker 1>chemistry company. So from that standard's absolutely very helpful in

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<v Speaker 1>terms of the background for the company. Now, I gotta

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<v Speaker 1>ask you this question, because you were, as you just describe,

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<v Speaker 1>spun out of DuPont and there are legacy legal issues

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<v Speaker 1>that exist. Can you shed any light on responsibility where

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<v Speaker 1>they stand and you know what you believe is going

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<v Speaker 1>to happen. Yeah, what I would say is when we

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<v Speaker 1>were spun out of DuPont, we we were spun out

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<v Speaker 1>with a variety of things, three fantastic businesses that we

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<v Speaker 1>talked about. UM. We were given a large amount of debt,

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<v Speaker 1>about four billion dollars a debt, and we had some

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<v Speaker 1>legacy liabilities that came over with us UM. I think

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<v Speaker 1>people were a little bit nervous about that, about the

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<v Speaker 1>debt and the and the legacy liabilities in the beginning,

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<v Speaker 1>and as you might have seen, our stock was sort

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<v Speaker 1>of bouncy in the beginning. But that's a nice that's

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<v Speaker 1>a nice way to do. I mean, just just to

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<v Speaker 1>mention in detail, right, this has to do with the

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<v Speaker 1>Washington Works plant I believe in uh Parkersburg, West Virginia, right,

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<v Speaker 1>And I had to do with the chemical used to

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<v Speaker 1>make teflon in manufact that's right, and so that that

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<v Speaker 1>liability still exists now it does live with DuPont, but uh,

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<v Speaker 1>you know it is connected back uh to us through

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<v Speaker 1>an indemnity. But I think what the reason the stock

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<v Speaker 1>was so volatile in the beginning is people weren't sure

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<v Speaker 1>what would this company be able to handle whatever came

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<v Speaker 1>back from the liabilities as well as the dead And

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<v Speaker 1>I think what we've shown is, you know we are

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<v Speaker 1>We put together right away a five point transformation plan.

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<v Speaker 1>You know, that plan was about taking costs down, focusing

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<v Speaker 1>our businesses on the three that we talked about, really

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<v Speaker 1>channeling our investments, UM, divesting in businesses that weren't our core,

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<v Speaker 1>which we've delivered about seven million of cash from that standpoint,

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<v Speaker 1>and really working on a enhancing our organization. As we've

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<v Speaker 1>been successful in taking the cost out and successful and

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<v Speaker 1>and uh shedding those businesses and taking the cash that

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<v Speaker 1>can be aimed down to bring our debt down. I

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<v Speaker 1>think people have gained lots more confidence in this company.

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<v Speaker 1>So I think a lot of those issues now are

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<v Speaker 1>getting lesser and lesser in the minds of our investors,

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<v Speaker 1>and that's why we're up stock price. So what drives

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<v Speaker 1>demand for your products. And of course one of the

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<v Speaker 1>big ones you say that the the titanium dioxide which

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<v Speaker 1>is in so many things including two paste. Uh. Is

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<v Speaker 1>it global growth? Is it certain kinds of new business

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<v Speaker 1>is being formed? Is it what happens in China? What? What?

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<v Speaker 1>What is going to determine what kind of year you have?

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<v Speaker 1>Say so, t I O two traditionally is a GDP

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<v Speaker 1>growth business, So it's going to grow at GDP around

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<v Speaker 1>the world. So whether you think of that at two

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<v Speaker 1>and a half or three percent today, that's the kind

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<v Speaker 1>of growth rate. It's almost a perfect correlation. But the

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<v Speaker 1>way you exceed that kind of growth is by bringing

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<v Speaker 1>in new products. So, for instance, we have a brand

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<v Speaker 1>new T O two product that we call Type here

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<v Speaker 1>one coat. It allows paint manufacturers to manufacture a paint

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<v Speaker 1>that you and I can apply in one coat. So

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<v Speaker 1>it's enhances because it has the hide ability, it has

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<v Speaker 1>the opacity that you need if you're going to paint

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<v Speaker 1>in just one brushstroke. Now you and I both know,

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<v Speaker 1>we both I'm sure painted rooms before, and it's torture

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<v Speaker 1>when you have to do it with multiple codes. So

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<v Speaker 1>if you can do it in one it's really a

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<v Speaker 1>lot of ease. So those types of things, whether it's

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<v Speaker 1>in our TIL two business or floor products business with

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<v Speaker 1>our refrigerat optition new products are really what we're going

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<v Speaker 1>to drive our growth rate beyond what GDP would be.

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<v Speaker 1>So just quick fun question, how much you're spending on

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<v Speaker 1>R and D. R and D for us is about

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<v Speaker 1>two to three percent of our revenue. Um it's it's

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<v Speaker 1>you know, aimed a little bit differently around those three bills,

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<v Speaker 1>but it's about two to three. Okay, Well, he's he's committed.

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<v Speaker 1>He's been up a percent since this company was born

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<v Speaker 1>a year ago. I'm talking about Kemore's CEO, Mark Vignal.

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<v Speaker 1>Thank you so much for joining us on. Kathleen Hayes

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<v Speaker 1>along with Pim Fox and this is Bloomberg