New Q Holding CEO puts company, employees first

PEPPER PIKE, Ohio—For Mauricio Arellano, the new leader of Q Holding Co. as of Feb. 8, a successful business legacy is a result of employee empowerment—not of an executive's personal goals or transactional philosophies.

As Arellano takes the reins as CEO of the more than 3,500-person manufacturing and technical solutions company, he said Q Holding prides itself on delivering elastomer medical, industrial and automotive devices "with humility."

"I grew up in an environment where I learned about the importance of not just business, but the people in the business," he said from his Northeast Ohio office on May 18. "A leader should enable a culture where employees can contribute and help the organization to grow, whether they are on the floor, in the laboratory or in front of a customer, with incredible dedication. An effective leader will focus on the culture and the people."

Growing up in communities both large and small in Mexico, along seaports and in interior metropolises, Arellano said he initially learned this humanity from his father, "a serial entrepreneur" as Arellano described him, a man of national pride who invested in his country through electronics, textiles and a host of other industries.

His childhood geography was constantly in flux, Arellano said, from the Yucatan to Mexico City. "We constantly moved around," he said. "I called a lot of different places home."

The virtues instilled by his father were furthered during his undergraduate education at the Autonomous University of Baja California in Tijuana, where he majored in business, before attending graduate school (master's of business) at UCLA at the Anderson School of Management while living in San Diego.

"For me, it was more than the degree. What drew me into business were the life experiences I gleaned from after-dinner conversations at home. I idolized my dad, learning about the importance of investment in a country," he said. "I knew business was what I wanted to do, but at the time there was no specific area or discipline. I needed to narrow that later in life."

After stints in the corporate culture while living in Buffalo, N.Y., Arellano began to streamline his management expertise while working for Sony Electronics, Tyco Healthcare Group L.P., Integer Holdings Corp. (formerly Greatbatch Inc.) and Pexco L.L.C., which became Spectrum Plastics Group Inc., where Arellano served as president of the medical division.

"While I was in Buffalo, I was constantly between there and Los Angeles," he said. "I became very familiar with red-eye flights."

With every new executive post, Arellano trended toward medical and industrial elastomer device companies. This evolution has concluded, at least for the time being, with his hiring at Q Holding as chief operating officer in 2018.

Arellano succeeds Thomas J. Hook in the top position for Q, a supplier of silicone solutions for medical devices, electrical connector seals and insulators. Hook will remain with Q as a non-executive director.

In addition to remaining with Q, Hook will become CEO of SaniSure, which, like Q Holding, is owned by the 3i Group private equity firm.

"We would like to extend our appreciation and gratitude to Tom for his contributions as CEO of Q," said Richard Relyea, partner at the London-based 3i Group. "Over the past four years, Tom has successfully led the business through considerable transformation and positioned it for continued long-term success."

Arellano cited Hook as a major influence in framing his own leadership philosophy.

"While my father taught me the importance of positive thinking and being present in your work, Tom Hook taught me the importance of understanding strategy and seeing the big picture," he said. "It would take me a long time to go through everyone who has influenced me with my leadership style."

Relyea said Arellano "brings a wealth of operational and leadership experience" to the top post.

"Throughout 2020, he played an increasingly pivotal role, overseeing all aspects of our QSR and QMD operating units and has demonstrated tremendous results in leading our key growth and performance initiatives.

"We are confident in his ability to successfully lead Q into the future."

Structure and growth
Q Holding maintains two basic segments, medical as well as industrial/automotive. The latter deals with elastomers in the transportation fields—from aerospace and automotive (including aftermarket), to construction, industrial, lighting and solar.

"I think regardless of what industry or what technology you employ, to compete effectively you need a core technology or service offering that truly creates value for customers in a meaningful way," Arellano said. "When it comes to Q, I think people under-appreciate our set of capabilities in silicone.

"We are not just best-in-class, we are broad and deep. This is unique to the company and in essence what attracted me to Q—the ability to play an important role in helping OEMs develop life-saving technologies," he said.

And in automotive, Q is helping to protect the more sensitive, critical systems that exist in harsh environments.

"We are embedded in that transformation," Arellano said.

What makes Q truly unique in the industrial/automotive and medical device fields, Arellano said, is that it tackles problems as a team and in direct cooperation with the customer.

"First and foremost, we are a technology solutions provider. When we are working on a problem presented to us, we tackle it ourselves, with team solutions in quality and design," he said, adding that Q has a comprehensive portfolio of proprietary devices that are "packaged, sterile and ready for distribution."

"We can engage much more effectively with a set of capabilities that are broad and deep. We refuse to be everything to everyone, but rather (we) focus on what we know. This generates value for our customers," he said.

With an enviable network of both manufacturing and distribution facilities (along with material scientists and research and development personnel) in North America, Israel, Slovakia, France and China—and this coverage is not by coincidence—Arellano said Q has become a true global medical device outsourcing company.

This is especially important in today's climate, as world economies emerge from the fog of a pandemic.

"What gives us purpose is that we make a difference, especially as a global pandemic turned the world upside down," he said. "It showed how incredibly nimble we are, producing lifesaving devices desperately needed by patients all over the world. We are very proud of that."

Arellano noted that some product lines impacted by the pandemic are beginning to return to normal, such as catheters and stents, especially as elective surgeries return.

But the medical device industry is not back to pre-COVID levels, Arellano said, and neither are the supply chains that move product.

"This applies to almost every supply chain," he said. "In the case of silicone capacity, the world of silicone material suppliers is highly concentrated. As one of the largest buyers, we are being impacted greatly. We are working miracles to serve our customers and it is a challenging time, to say the least, across all commodities. We need to manage, share and mitigate, as these issues will be here with us for awhile."

Research and development

Material innovation is one of the constants in the medical device industry, and that certainly is the case at Q Holding.

In the interventional area, Q has been working on the peripheral vascular platform for years, with catheters, stents and entero feeding devices, which can vary greatly by patient. Silicone tends to be the foundational elastomer in many cases, but not always.

"We do all of the above in combining material science," Arellano said, "with our world-class LSR, HCR and silicone extrusion products. We have made significant investments in extrusion and our rapid-prototyping capabilities. That is core to our service offerings.

"We work with customers to find that special formulation, but sometimes silicone is not always the solution. Other thermosets, like polyisoprene, butyl rubbers, halogen butyl and nitrile rubbers, can be solutions," he said. "We work with organics and inorganics extensively, as well as specialty coatings."

Arellano added that he hopes to see the realm of electrical seals and insulators (outside of medical) expand under his leadership, but reiterated that success continues to be a function of the business and not the individual.

"When you think about legacy, this is a very difficult question to answer," he said. "When you believe in empowerment, it becomes more about the mission for the business, not the individual. We are very attuned to the macro-shifts across the move to EV, to the macro-shifts in the medical industry—we are embedded in these shifts, like robotic surgery.

"I see us step-by-step earning our way to becoming a household name. Medical device delivery with humility—functioning as an extension to our OEMs and customers—that, for us, is truly inspiring. As I reflect on the significant accomplishments Q has made over recent years, the strength of our organization and the opportunities that lie ahead, I could not be more proud of the business or more enthusiastic about its future."