Corporate Structure Has Changed

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BOARD OF DIRECTORS

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Vice Près. Production

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M A N A G E M E N T

Hooker Realigns, Gets Set for Sixties Hooker Chemical Corp. is starting the 1960\s at a new address: 666 Fifth Avenue. The move itself marks a company milestone, as corporate head­quarters returns next month to New York City after more than 20 years on the Niagara Frontier.

But the move's significance runs deeper. It culminates a year of sweeping change throughout the com­pany's corporate structure. Girding for the competitive decade ahead, Hooker has decentralized its chain of command and revamped its opera­tions.

44 C & E N F E B . 15, 1 9 6 0

Several developments prompted re­cent reshuffling of executive duties. Hooker has digested and integrated four major mergers in recent years. It is grooming a team of young execu­tives to take the helm as present top management retires. Finally, it wants to pave the way for an ambitious S100 million expansion program mapped out for the next few years.

Operating control at Hooker long was held tightly at its Niagara Falls, N.Y., headquarters. This worked well enough while the company remained primarily a producer of basic chem­

icals, with only two or three plants and by far the largest part of its opera­tions centered at Niagara. But as the company diversified, both geograph­ically and in products, centralized con­trol proved less effective.

Mergers Set Stage. In 1955, Hooker acquired Durez Plastics, add­ing phenolic resins and molding com­pounds to its own line of chlorinated polyesters. Later the same year it took over its Niagara Falls neighbor, Niagara Alkali, to move into potassium chemicals and increase its caustic-chlorine capacity. The following year

1957

TO THIS NOW WËSÏDENti

Vice Près; J (economics)

Senior Vice Près.

Senior Vice Près*

•Ψ Vice Près. Marketing

& Research

Director of Marketing

Director of Research

Director of General

Development

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Gen. Counsel χ |

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Vic^fres; Senior

Vice Pros;

Director of Industrial Relations *

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Chemical Div. i

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W e S t V " • ^Chemica l Div.

Vice Près. Divisions & Engineering

Gen. Mgr. Eastern

Chemical Div.

Gen. Mgr. Durez

Plastics Div.

I · Gen. Mgr. jX Phosphorus l5

' v Div.

Director of Engineering

Company decentralizes operations, revamps executive line-up, sets stage for expansion in coming decade

Oldbury Electro-Chemical, another Niagara Falls company, came into the fold, adding phosphorus chemicals and chlorates to the product mix. Fi­nally, acquisition of Shea Chemical two years ago broadened Hooker's phosphorus operations to include phosphates and phosphoric acid.

All of these companies were big op­erations in their own right. As a group they probably are responsible for more than half of Hooker's present sales. In 1954 the company earned about $4 million on sales of $45 mil­lion. Last year (Hooker's fiscal year

ends Nov. 30) sales totaled $149.8 million, yielding profits of $13.4 mil­lion. President Thomas E. Moffitt predicts that 1960 will be better yet. Sales may be up 5 to 7%, he expects; earnings should show "modest im­provement, in spite of inflationary cost increases."

Mergers have done more for Hooker, however, than just make it bigger and stronger financially. They have radically changed the company's entire complexion. In 1954 Hooker had but two plants, plus another (at Montague, Mich.) then being built.

Now it has a dozen plants, as well as joint interests in two others, and a new phosphate facility under construction in Mexico. Hooker, Mr. Moffitt points out, now is a composite of five com­panies, interrelated but differing in products, raw materials, and custom­ers.

New Line-Up. It was to resolve these differences that Hooker decen­tralized. Two years ago Durez Plas­tics became an autonomous division, responsible for production of phenol-ics and diallyl phthalates and for sales of all plastic products. Divisionaliza-

FEB. 15, 1960 C & E N 45

; DIRECTOR^,

President T. E. Moffitt: Man at the helm Vice president F. L. Bryant: Under his duringayearof sweepingchange wingare Hooker's long-range plans

Vice president T. F. Willers: He runs company operations east of the Rockies

This is Hooker

EASTERN CHEMICAL DIVISION

Niagara Falls, N.Y.* Chlorine, caustic soda, caustic potash, phos­phorus and phosphorus chemicals, chlorates, other heavy and fine chemicals

Columbus, Miss.

Montague, Mich.

Sodium chlorate, phosphorus pentasulfide

Chlorine, caustic soda, hydrogen chloride, hexa-chlorocyclopentadiene (C-56)

WESTERN CHEMICAL DIVISION

Tacoma, Wash.* Chlorine, caustic soda, ammonia, tr ichloro-ethylene

Spokane, Wash. Wood flour

DUREZ PLASTICS DIVISION

North Tonawanda, N.Y.* Resins and molding compounds, phenol

Kenton, Ohio Molding compounds

PHOSPHORUS DIVISION

Jeffersonville, Ind . *

Columbia, Tenn.

Dallas, Tex.

Adams, Mass.

Phosphates, phosphoric acid

Phosphoric acid, dicalcium phosphate, ferro-phosphorus

Phosphates, phosphoric acid

Sodium tripolyphosphate, phosphoric acid

HOOKER CHEMICALS, LTD.

North Vancouver, B.C. Chlorine, caustic soda

HOOKER MEXICANA, S.A. Lecheria, Edo. de Mexico

Phosphates, phosphoric acid

JOINT VENTURES

HEF, Inc., Columbus, Miss, (with Foote Min­eral Co.)

Solar Salt Co., Grants-ville, Utah (with Penn-salt Chemicals Corp.)

Ammonium perchlorate

Solar evaporated salt

* DIVISION HEADQUARTERS (Typical products listed do not include chemicals made solely for capture use.)

tion was completed early last year when three more autonomous units were set up: Western Chemical, Eastern Chemical, and Phosphorus. Each division operates as a separate "profit center." Each has its own sales, production, and industrial relations managers.

The realignment is more complex, though, than it might seem at first glance. Separation is partly on geo­graphical lines, partly by products. The phosphorus and plasties sales forces operate nationwide; on the other hand, chemicals made by the Eastern Chemical 'division are sold by Western Chemical division salesmen west of the Rockies. Hetron polyester resins are produced by the Eastern Chemical division at Niagara Falls but sold by Durez. And phosphorus op­erations at Niagara Falls (in facilities acquired with Oldbury) are part of the Eastern Chemical division rather than the Phosphorus division.

The present setup, Mr. Moffitt points out, is designed for maximum operating efficiency and maximum management development. No two divisions share jurisdiction in any single plant. The going organizations acquired with Durez and Shea are kept largely intact. On the other hand, Oldbury and Niagara Alkali opera­tions, which more closely complement Hooker's original product line, have been tied in with the Eastern Chemical division.

One More Step. But divisionaliza­tion alone was not the complete an­swer, Mr. Moffitt concedes. He found that he had 15 people reporting di­rectly to him, an unwieldy situation. So last fall saw further shifts. Vice president Thomas F. Willers, 40, who had been general manager of the East-

46 C & E N FEB. 15, 1960

ern Chemical division since it was es­tablished a year ago, assumed over-all responsibility for the Eastern Chem­ical, Durez, and Phosphorus divisions, as well as for all corporate engineering. In essence, he now heads all day-by-day operations except those west of the Rockies.

At the same time, vice president F. Leonard Bryant, also in his forties, took over responsibility for corporate mar­keting, research, and general develop­ment. (Marketing includes such cor­porate functions as market research, advertising, transportation, and long-range market planning; field sales are handled separately by each division.) Under Mr. Bryant, then, are those activities which primarily affect the company's future development.

While taking a load of details off the president's shoulders, the new arrangement should also serve an­other function. Several of Hooker's top executives are nearing retirement. Chairman R. Lindley Murray stepped out of full-time participation in com­pany affairs last December. Senior vice president Earl L. Whitford re­tires at the end of this month. Mr. Moffitt and the three remaining senior vice presidents are slated to retire within the next few years.

Consequently, a number of younger men are being assigned to broader planning and supervisory positions that will train them to step into top jobs. Not only have operations, sales, and research organizations been re­modeled, but corporate industrial re­lations, finance, engineering, and other departments have been revamped.

Now most of the pieces are in place at Hooker—but not quite all. The Western Chemical division should ul­timately get a general manager; its sales and production staffs still report directly to company headquarters. Plans also call for a still unnamed di­rector of marketing (under Mr. Bry­ant) and a new director of finance re­porting directly to the president.

Manhattan Transfer. How does the move to New York tie in with these changes? "Once we had decentralized our management functions," Mr. Mof­fitt explains, "we did not want to keep our main office adjacent to one of our plants. We had to get our top officers away from strictly local problems. And we wanted to be sure that all our divi­sion executives knew they had full responsibility for their own opera­tions."

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F E B . 15, 1 9 6 0 C & E N 47

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"And once we decided to move," he adds, "there was no reason not to go to the center of things: Manhattan. There we can get better acquainted with our many important customers and suppliers based in the New York area. We should have a greater chance to become exposed to fresh ideas."

The move has yet another implica­tion. In New York, company execu­tives will be able to keep in closer touch with world-wide developments. Like many another chemical firm, Hooker is showing more interest in foreign lands.

Until recently, Hooker has had only one operation outside the United States—a three-year-old chlorine-caus­tic plant at North Vancouver, B.C., operated by a wholly owned Canadian subsidiary as a unit of the Western Chemical division. Then, last year, Hooker formed a Bahamian corpora­tion, Hooker Chemical International, to facilitate entry into Latin America. Another new subsidiary, Hooker Mex-icana, S.A., will soon complete a $1.2 million phosphoric acid and phos­phates plant near Mexico City. In addition, Hooker plans to evaluate Mexican phosphate rock deposits, share in their development if they

look promising. Projects in other Latin American nations, including a jointly owned plant in Argentina, are getting active consideration.

Last year, too, Hooker established an office in London. Its object: to keep abreast of European technology, seek new products, investigate possi­ble foreign ventures, and bring new Hooker developments to Europe.

For the next few years, though, most expansion will probably be in the U.S. The present $100 million expansion program for 1959-63 fol­lows some $71 million spent over the previous five years. Outlays dropped from $16 million in 1957 to $8 million in 1958 and $7 million last year. This year, however, the program should start swinging into high gear. Investment may run to between $16 and $18 million, could go even higher. If the $100 million program is to be completed as scheduled, outlays will have to increase further.

Can Hooker afford to spend so much? Mr. Moffitt is certain it can, using cash from depreciation and re­tained earnings, plus more than $24 million garnered when convertible debentures were sold to stockholders last September. Last year Hooker generated about $15 million (after

dividend payments), well above ac­tual outlays. That, together with the proceeds from the bond offering, gives it a good cushion now. Once plant in­vestment gets going in earnest, how­ever, Hooker hopes increased earnings will keep income and outlays in step.

Two Ways to Grow. A good part of Hooker's capital budget will be used for basic capacity: more caustic, chlorine, phenol, and phosphorus. These are its building blocks. The company would also like to become more self-sufficient in raw materials. Since its biggest purchases (in dollar volume) are benzene and methanol, integrating backward into hydrocar­bon raw materials seems logical to Mr. Moffitt.

Though planning no new chlorine-caustic plants, the company does ex­pect to expand its present facilities. It is spending $10 million to install Hoechst-Uhde mercury cells at Niag­ara for producing low-chloride caustic soda and caustic potash to supplement present output from diaphragm cells. Further expansion at Niagara, based on Hooker S-type cells, is in the cards. And engineering for an expansion at Vancouver will start this year.

While expanding in basic chemicals, Hooker also expects to invest in facili­ties, such as the new thionyl chloride plant planned at Niagara, for upgrad­ing such products. Like other chlo­rine-caustic producers, it sees little likelihood of markedly increasing the profitability of electrolytic cell oper­ations. Therefore, says Mr. Moffitt, "we must look to new products to boost return on our plant investment."

The company already has come a long way in this direction. Basic chemicals (chlorine, caustic soda and caustic potash, hydrogen, phenol, and chlorates) add up to only a little more than a quarter of total sales. A vari­ety of upgraded products accounts for nearly half of dollar volume, plastics and resins for most of the balance. Hooker sells almost all of the caustic soda it produces, but uses about half of its chlorine to make other products. And most of its phosphorus output (rated capacity: 51,000 tons a year) goes into captive production of phos­phorus compounds.

Growth Areas. What areas look most promising at present? Plastics is one. Durez division sales jumped 4 1 % last year while polyester business alone nearly doubled. Hooker wants

48 C & E N FEB. 15, 1960

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to broaden its present line, now limited to polyesters, phenolics, diallyl phthalates, and urethanes. "We have a strong urge to get into thermoplas­tics," says Mr. Moffitt, "either through present types of polymers or new ones we develop ourselves." Hooker will also round out its line of Hetron fire resistant polyester resins soon with a series of standard polyesters.

The company sees a promising fu­ture, too, for chlorinated organics, ag­ricultural chemicals (it tested more than 300 potential pesticides last year), and detergents. The soap and detergent industry is Hooker's biggest single customer, accounting for close to 157c of sales, and Hooker expects to strengthen its position further this summer when it starts turning out tet-rapotassium pyrophosphate at Jeffer-sonville, Ind., for liquid detergents.

Research spending pretty well mir­rors Hooker's growth plans. "Our goal," says research director C. A. Stiegman, "is to develop new products with unique properties and high profit potential as well as to improve present products." About two thirds of Dr. Stiegman's research budget (nearly $4 million last year) goes into chemi­cal projects, one third into plastics re­search and development. Sales of new products have doubled in each of the past three years, Dr. Stiegman says. He hopes to have about seven new products ready for market devel­opment this year; 22 went to divisional sales departments last year.

A major development push now is on a new line of polyurethane foams with fire retardant properties built into the polymer molecule. Considerable research effort is focused on phos­phorus chemistry also. The research group has synthesized many new or­ganic compounds containing phos­phorus in the lower valence state and is working on methods for producing phosphorus-carbon bonds at lower cost. Polymers with phosphorus as an integral part of the molecule are get­ting a lot of attention. In view of Hooker's basic position in both phos­phorus and chlorine, the company is using these and other chemicals in re­search on flameproofing.

At the same time, Dr. Stiegman sees to it that each research man can spend about 10% of his time on "blue sky" research, following his own bent into any area, within reason, that tempts him. From this type of work, Hooker hopes for major discoveries.

50 C & E N FEB . 15, 1960

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