Peggy Viehweger describes how this company stands on its own after being part of a larger organization. Liz French reports.

When large companies sell a division in an effort to consolidate, downsize, or streamline, it’s not always be perceived as a positive. Changes associated with the sale strike fear in the hearts of management and employees alike, but Peggy Viehweger, CEO of Supresta, a former division of multi-billion-dollar Azko Nobel, saw it as the perfect opportunity to start fresh.

Ardsley, NY-based Supresta manufactures phosphorous-based flame retardants, which can be found in everything from computer and cell phone casings to air plane seats. Once a division of Netherlands-based Akzo Nobel, a global manufacturer of chemicals, coatings, and pharmaceuticals, it was sold to Ripplewood Holdings, LLC two and a half years ago.

Ripplewood kept the management at Supresta intact and set the company up as a standalone. As part of Azko Nobel, Supresta had its own manufacturing plants, sales people, and R&D, but didn’t have support functions such as accounting, HR, or IT, as they were provided by the larger entity.

Peggy Viehweger

“We recruited for all the functions of an independent company in 2004, and it was a huge opportunity to influence our culture. I firmly believe that how you measure productivity determines what gets done, and I’m proud to say that in our third calendar year as a standalone company, I can see a dramatic difference in the way we set and achieve goals, reward performance, and perceive ourselves as a team,” said Viehweger.

As a standalone, Supresta has taken a different approach to goal setting than it did under the Azko Corporation. At the end of every calendar year, the seven-member management team at Supresta sets six to eight corporate goals, with quarterly milestones, for the coming year. Each member takes those goals to his or her direct reports who establish their own set of goals, which cascade down to the next tier, and so forth, until everyone knows exactly what he/she needs to do to support the company’s mission. Throughout the year, management’s and employees’ performance is assessed based on their specific goals using a scale of one to five. “This reward system eliminates subjectivity and gets all the noses pointed in the same direction,” said Viehweger.

One of Supresta’s first goals as a standalone was to prune its product offerings and emphasize operational excellence. When Viehweger took the lead job at Azko Nobel’s phosphorus business in 2003 (she had held other positions in the company), she and her team spent 12 months assessing the company and its competition looking for opportunities. They realized that of the company’s 200 products, only 100 were profitable. Today, the company makes about 80 products, all of them phosphorous-based.

Viehweger explained that many competitors started off in the bromine flame retardant business, and, through acquisition, took on phosphorous-based products as well. “We didn’t want to be all things to all people. We have the most depth in phosphorous technology, and phosphorous has some advantages over other flame retardant chemicals. We decided to ride that to success,” she said.

Team excellence
When Viehweger and her team assessed the company in 2003, they formed six operational excellence teams to recommend opportunities for improvement in every facet of the business. Immediately, performance issues came to the fore.

Based on recommendations from its process technology team, Supresta made significant improvements to its manufacturing process in 2006, which directly affected product yields. “Our goal is for 99% of the raw materials used in the manufacturing process to result in a flame retardant chemical as opposed to getting lost in a side process,” Viehweger explained, adding that the company was already achieving 99% yield for some processes, but others were around 95%.

The company was also able to cut back on transitional losses incurred when a plant switched between chemical configurations. “Every time we began manufacturing a different product, we’d experience significant losses, but with the help of our process technology team, we’ve saved $1 million a year on yield improvements.”

As a global company with regional sales offices in Shanghai, Holland, and New York and manufacturing plants in Germany and West Virginia, Supresta has to stay on top of its game. Viehweger explained that the flame retardant industry is highly regulated by government and the insurance industry, so the company has to stay informed as to the latest legislative developments worldwide.

To aid in those efforts, Supresta promoted a manager to director of advocacy and governmental affairs in 2003. According to Viehweger, this individual’s job is two-fold. He attends various outsider meetings and stays on top of legislation in an effort to influence it toward the use of phosphorous. “Most importantly, he predicts where legislation is going so we can develop compliant products in time,” she said.

The director’s other job is to help downstream customers understand the value of flame retardant materials and fire safety. “We help, for instance, a furniture manufacturer see flame retardants as a valuable selling point, and we work with them to develop products that meet their needs and increase their competitive advantage.”