Insider Interview with John Panichella, President of the new Ashland Specialty Ingredients.

On May 31, Ashland Inc. announced its intention to purchase International Specialty Products Inc. (ISP) for $3.2 billion. The deal closed on Aug. 23, and brought two players in the coatings industry together. When you look at the acquisition, it reflects a combination of different functional platforms for the industry.

As Ashland brought the newly acquired company into its portfolio, it renamed the combined businesses Ashland Specialty Ingredients. Over the next few months Ashland will continue integrating the former ISP with its former Ashland Aqualon Functional Ingredients commercial unit. John Panichella is president of the new Ashland Specialty Ingredients. PCI took the opportunity to ask Mr. Panichella a few questions about the acquisition and what the implications are for the coatings industry.

PCI: How does the acquisition of ISP change or enhance Ashland’s focus on the coatings industry?

Panichella: There are a number of ways that Ashland’s acquisition of ISP enhances our customer offering to the coatings industry. First, consider our portfolio of additives prior to the acquisition, which was centered on our flagship product lines, Natrosol™ hydroxyethylcellulose and Aquaflow™ nonionic synthetic associative thickeners. These rheology modifier technologies, along with our foam-control additives (Drewplus™) and specialty surfactants (Dextrol™ and Strodex™), enable coatings manufacturers to formulate water-based products with customized rheology profiles that included creamy in-can feel, best-in-class spatter resistance, excellent color reproduction, sag resistance and leveling capabilities.

With the addition of ISP, the opportunity emerges to bring a much broader portfolio of additive technologies to our customers. The performance polymers from ISP for coatings include supplemental rheology modifier chemistries as well as other technologies that can provide UV stability and help disperse and stabilize color and intensity. In addition, the ISP biocide portfolio brings a completely new functional category to the Ashland portfolio, including both in-can and dry-film preservatives for the prevention of fungus, mold and mildew.

The combined portfolio also includes numerous products for wood coatings that include UV protection, color stabilization and rheology. Expanded access to this new market segment is exciting for Ashland, and we will be working to communicate our full portfolio of products and benefits to more customers and market segments in the coming months.

You can see how expanding our offering beyond rheology, foam control and surfactants makes for a broader and powerful combination of benefits for our customers.

PCI: Will any new technologies be brought to the table as a result of the acquisition?

Panichella: Of course we are optimistic that the combined expertise of both companies will yield new technology and ultimately new products for our customers. We expect to be looking closely at the technologies we each have and how best to bring those together to identify potential technology synergies. As such, we are looking forward to bringing the scientific expertise of both organizations together. In addition, one of the attractive aspects of ISP was the robust nature of their new product pipeline. Look for coming announcements.

PCI: What does the acquisition mean for coatings formulators?

Panichella:This acquisition brings together two complementary technology portfolios that can be offered from a single supplier. For formulators, this means they will have fewer key supplier partners to manage and the convenience of finding formulating solutions faster and easier, by dealing with a single technical organization. We look forward to arranging technical seminars and exchanges with our customers wherein we can demonstrate our expanded array of technical expertise and capabilities. From a customer perspective, this will really be powerful.

PCI: Availability of products…will you increase or decrease production?

Panichella: There should be no disruption of products or services as we integrate the two organizations. There is very little overlap in products and services. Together ISP and Ashland truly balance and supplement the overall product offering.

PCI: How will customers buy ISP or Ashland products?

Panichella: There are no immediate changes in any of our current business activities, processes or relationships. Customers will continue to work with the same sales, service and support on whom they have always depended; and the selling legal entity with whom they do business will remain the same. All products, product names/codes/brand names, packaging, labeling, MSDS, pricing, etc. will be unchanged. No changes are being made to manufacturing locations, manufacturing processes or product quality, nor will there be any changes in the addresses on quality documentation such as Certificates of Analyses, specifications, etc. For normal business or emergencies, current contact points, offices, addresses, telephone numbers, etc. are still valid. Ordering, delivery and invoicing processes, including documentation, do not change.