FAIRLAWN, Ohio—A. Schulman Inc. is heading in the right direction after a comprehensive review of its business, according to CEO Joseph Gingo.
Fairlawn, Ohio-based Schulman—a leading compounder in both North America and Europe—undertook the review after a series of financial shortfalls connected to its $800 million purchase of Citadel Plastics led to the ouster of CEO Bernard Rzepka and the return of Gingo, who had led the firm from 2008-14.
Schulman worked with financial firm Citibank of New York on the review, which included all possibilities, including the potential sale of the firm. In a Nov. 18 interview in Fairlawn, Gingo said “anything is possible,” but that Schulman has a plan to move forward with its existing businesses.
“Citi did a good job for us,” he said. “As a bank, they were able to vet our numbers and projections in terms of our own business and our end markets.
“They looked at our number and refined our growth,” Gingo added. “That tempered our optimism a little. Now we can re-set the company.”
Schulman had made 10 acquisitions with Gingo at the helm, but the price tag for Citadel was bigger than the previous 10 deals combined.
“We had been growing slow but steady, then Citadel hit,” Gingo said. “Citadel was a big acquisition, and it looked like a good fit. We would have never bought Citadel if we had known about the fraud there.”
Schulman is seeking damages from Citadel's previous owners after concerns were raised about some materials made at Citadel's Lucent Polymers unit in Evansville, Ind. Recycled-content compounds made by Lucent were unable to be reproduced at other Schulman plants because of faulty data. Customer claims made about these materials also were never recorded, Gingo said, so there was no reason for Schulman to question the material testing.