Plaza Group celebrates one milestone as it aims for another

HOUSTON—Plaza Group Inc., the North American distributor for Versalis elastomers, is celebrating its 20th anniversary with a commitment to reach $1 billion in revenue by 2020.

“Well, obviously, we won't get (to that revenue goal) through the organic growth method,” said Chief Operating Officer Doug Fluke. “We will take on new lines, and we're in the process of taking on a significant number of new product lines to sell. We're taking on new geographic responsibilities, so we're broadening our geographic marketing area.”

Fluke said an announcement will come soon, detailing new product lines and alliances. The firm said its revenues in 2013 exceeded $300 million.

Sales Director Steve Willett credited two items for the Plaza Group's success: its outsourcing business model and its core values. “It's the acceptance within the petrochemical and polymers industry of our outsourcing business model,” he said.

He said companies have realized that while they may have resources to service most of their customers, there might be a portion of customers they may not be able to service for various reasons.

For example, Willett said a motor gasoline refinery might make the gas, heating oil, etc., but the Plaza Group “can take that to the chemical market for them.”

“The business model we employ ... we're not a distributor, per se, and we're not a manufacturer,” Fluke said, “but there are many companies that are in the manufacturing business that choose to employ their resources in areas of their core strength.”

While a company will sell a product integral to its business, Fluke said, it might choose to outsource another product when it lacks a core strength, such as in administration services, legal services or other areas. The Plaza Group then will take on that product or a stream of products not in its core customer base.

Plaza Group Trading L.L.C., a subsidiary of Plaza Group, was established in 2011 to support its expanding global operations and to enhance the value it brings to customers and suppliers. Plaza Group Panama, also a subsidiary of the Plaza Group, was established in 2010 in response to the growing Latin American market and its global importance in the supply chain of chemical products.

“We do a lot of business south of the U.S. border,” Fluke said.

“It's another reason why many companies want to approach us to do business because they like the access and the capabilities we have of doing business in that part of the world.”

Fluke said the Plaza Group has the capability to market products in Mexico and Latin America. The company is working to put more resources in its Latin American marketing operation, noting that the firm has added staff in Latin America, Venezuela and Panama, and plans to add a staffer in Mexico.

“We've also taken on several part-time people to help us explore new markets,” he said.

The Plaza Group is looking to enter the cleaning, sterilization and energy industry, Fluke said, “some of the faster growing industries where we see better than average margins. And we're researching those right now for possible investments.”

Fluke said the Plaza Group is looking to participate more in America's shale oil/shale gas resurgence.

According to Willett, the Plaza Group is active in solvent and intermediate applications in the energy industry, such as aromatic solvents for drilling mud.

The Plaza Group is working with compounders who service that market, as well as others in developing polymer products. “We're seeing additional technology is required because ... you get high heat when you're drilling through the shale sediment,” Willett said.

“We're also seeing, within the North American shale play, a need for new rubber compounds, in things like hoses, belts, gaskets, tires, seals, other applications. ... That's where we see a big growth opportunity as well.”

The Plaza Group provides indirect support through its suppliers, said Willett, particularly Italy-based Versalis.

“They have a strong technical group, and they're very supportive of our efforts. It's very easy to have them look at these opportunities as they come down the line ... and recommend the polymers for the application,” he said.

The North American distribution of the Versalis product line includes Dutral EPDM, Europrene NBR, SBR, SSBR, SEBS, SBS, SIS, Neocis and Intene.

Willett said the Plaza Group is proud of the Versalis brand.

“These are long-standing brands that have been in the rubber industry for quite a while,” he said. “Naturally, we're proud to have them in our product line and also know they're going to be very successful when they are implemented in a compound or formulation.”

Fluke lauded the company's strong customer service and logistics teams. He said the company has a couple hundred railcars.

“We are good at the logistics piece of moving bulk to different parts of the country,” Fluke said. “We do it better than a lot of companies.”

Willett said customers hear a live person answer the phone at the Plaza Group. “You don't call an 800 number and punch in the number keys to try to find out the proper department to talk to,” he said. “It's that hands-on human touch that we think distinguishes us from some of our competitors.”