PPG silicas deal key to new Qemetica business strategy

WARSAW, Poland—Qemetica S.A.'s acquisition of PPG's silicas products business was a true corporate odyssey with the process taking up nearly all of 2024.

But the CEOs of both companies say their businesses are thriving now that the deal is done.

The two firms finally linked up following a seven-month strategic review process of PPG's silicas business that began in January 2024. Although the acquisition was still open at the time, PPG CEO Tim Knavish said in July 2024 his company was "pleased" to reach an agreement with Warsaw, Poland-based Qemetica.

"This transaction will allow us to further focus our resources on our technology-differentiated coatings and specialty products businesses to accelerate our organic growth and drive increased shareholder value creation," Knavish said in a statement.

Finalized on Nov. 25, the acquisition's $310 million price tag was good for the ninth-largest rubber-related deal of the year by sale value. Qemetica CEO Kamil Majczak said that moving into the U.S. was a "natural first step" for the company to truly go global.

"In the spring of 2024, the company identified potential acquisitions to strengthen the group and seek new growth drivers," he said. "Qemetica had a clear goal to not only grow the group with our 'European leg' but to become a global company.

"We want to diversify our portfolio to appear in markets and businesses that promote growth."

The acquisition is one of the largest ever by a Polish company in the U.S. market, according to Majczak. Qemetica officials added that this deal makes the company the third precipitated silica company in Europe and just the second in North America.

The acquisition is one of Qemetica's first major moves into North America. The new assets will help Qemetica produce more precipitated silica than ever, Majczak said, furthering the Polish company's reach across nearly 100 countries in markets including tires, batteries and food products.

"The acquisition of the precipitated silica business was a strategic move for Qemetica," he said. "We see this as a major opportunity to improve the efficiency of production in Lake Charles, La., increase capacity and strengthen cost position. Lake Charles is in a region with lower gas prices compared to Europe. This offers an additional advantage to optimizing production costs."

The PPG deal brings not only new business opportunities, but hundreds of new employees into the fold, Majczak said. The acquisition adds 400 new workers to the company's established work force of nearly 3,500.

"Qemetica has opted for a business model that empowers its business units to facilitate potential acquisitions while accelerating integration with the company's central processes," Majczak said. "Qemetica Silica will become one of Qemetica's core areas of business. The group intends to use its potential to develop newly acquired business."

Qemetica has built its business and expansion plan on three key principles, according to Majczak. He believes that these principles—which he referred to as heritage and experience, improving efficiency, and on-site production—match up with what the company gained from the PPG acquisition.

"The acquisition involves acquiring the knowledge from PPG, which has pioneered precipitated silica applications over the years, particularly in rubber," Majczak said. "This expertise is difficult to replicate and provides a solid foundation for further development."

With the deal now complete, Qemetica has big plans for its silica business unit in 2025. Already the Polish company's second largest sector in terms of company revenue, Majczak said that Qemetica Silica is set to become one of its financial powerhouses, with the business unit showing "excellent and stable prospects" since the acquisition closed.

"The group has focused on a business model that empowers its business units to facilitate further acquisitions while accelerating integration with the company's central process," Majczak said. "Qemetica Silica will become one of Qemetica's core areas of business. The group intends to use its potential to develop newly acquired business."

PPG's silicas products business was the first move for Qemetica, but far from the last, according to Majczak. He explained that the newly acquired assets will once again fold nicely into Qemetica's plans for the near future. In addition to PPG's decades of silica knowledge, work force and product portfolio, the company also will be taking over sites in Barberton, Ohio; Monroeville, Pa.; Lake Charles; and Delfzijl, Netherlands. Majczak expressed excitement with the new investments throughout these sites, specifically citing the Lake Charles plant as an area to strengthen the company's production.

"Investments in Louisiana will not only upgrade technology but increase production capacity," Majczak said. "Their optimization is based on Qemetica's experience in other businesses and addresses areas such as reducing loss and improving energy efficiency.

"The refurbishment of the furnace in Lake Charles, completed by the previous owners, is already being optimized by Qemetica's specialists, further strengthening the company's advantage."

Majczak said that the PPG acquisition increases innovation throughout Qemetica and further expands its portfolio of sustainable products. Looking to the future, he said that grabbing a foothold in North America was the beginning. Now the company will be open to reaching more markets in the near future, including possible moves into Asia.

"Following the purchase of PPG's silicas business, continued growth will be a priority for us in 2025," Majczak said. "We will not close ourselves off to Asian destinations or smaller acquisitions that have potential to our business. We want to have a modern and diversified portfolio and continue to be leaders in the global industry."