Lion, Irani forging path forward in SR

KNOXVILLE, Tenn.—In the late summer of 2021, both Lion Elastomers L.L.C. and Kho Irani, a veteran executive on the rubber side of ExxonMobil Chemical, were at a crossroads.

Geismar, La.-based Lion was looking for a new president and CEO after Jesse Zeringue, a 31-year veteran of the independent producer of synthetic rubber, left after spending eight years as the firm's top executive. Private equity firm SK Capital Partners L.P. hired Zeringue as president and CEO of its Deltech Holding L.L.C. platform.

At the same time, Irani had been at ExxonMobil for 17 years and was having what he described as a "mid-career crisis." It was right in the middle of the COVID-19 pandemic and he found himself looking in the mirror, thinking he maybe had 10 or 15 prime working years left in his career.

"ExxonMobil is a fantastic company with great technologies," Irani told Rubber News at the ACS Rubber Division's International Elastomer Conference in Knoxville. "But the ability to make an impact on a business at a company that size is very small. Almost zero."

With that backdrop, Lion Elastomers found a new leader to steer its ship, hiring Irani as president and CEO effective Nov. 1, 2021. And he found a rubber producer where he felt he could make his mark, and run things his way.

Irani started with ExxonMobil in 2004 at its Akron Santoprene business, which at the time still was known as Advanced Elastomer Systems.

"When you move to Akron, you may work for Santoprene, but you get ingratiated into the rubber industry, the history of it, the academics of it, with the University of Akron right there," he said.

From there, he moved through a number of areas with ExxonMobil. He rotated to financial analysis and sales, where he went from automotive to consumer to industrial goods. He then did a stint in process oils, which were used in viscosity modification, one of the largest uses of EPDM.

Irani then was transferred to the industry giant's EPDM Division and into manufacturing, where he learned how rubber was made, including butyl as well as EPDM. His last stint was as global process technology manager for the tire market.

While he enjoyed his years at ExxonMobil, it was clear that the rubber business was not the firm's top priority.

"The rubber business was de-emphasized," he said. "It wasn't explicitly said, but when you compare the contribution of polyethylene or polypropylene to ExxonMobil with that of rubber, it's not their focus. And it shouldn't be, in a company that big."

When the Lion Elastomers job came open, it intrigued Irani. He had worked with Lion his last four or five years at ExxonMobil, evaluating various commercial opportunities.

"I just saw that it was a very customer-focused organization. It was focused on the rubber industry, and that was alluring to me," he said. "A leadership position at a smaller company can have a really big impact, whereas a leadership position in a large company, not so much."

Irani also ticked a number of boxes that Lion Elastomers was looking for. The SR producer wanted someone who was familiar with the industry and could hit the ground running.

"I think the other thing that was important was bringing fresh insights into the company," he said.

After landing the job, Irani said he told the owner that for the first 90 days—a period that eventually stretched to five months—he would not do anything but watch, listen and learn.

"Lion is a mainstay in the rubber industry, so there are things the company is doing well, and for me to come in and just make changes would be negating or even breaking some of the things Lion did well," he said.

He said the learning curve was a bit tough because it came right in the heart of a COVID outbreak.

And Lion was experiencing a trend shared by many other companies—both in and out of rubber—which was the devastating impact of employee turnover and retirements.

That is particularly true since one of the strengths of Lion was the tenure of the staff.

"Customers intimately know Innie Hernandez, who is our customer service manager, and they've known her for years. And they trust her, and they love what she does for them," Irani said.

"Our operations folks look to Ken Van Zandt for the experience that he brings and his knowledge of the equipment and the plant itself. When it comes to environmental, health and safety, Keith Gordon knows exactly what to do because he's seen it and done it before.

"That experience is absolutely critical to the foundation of a successful company."

On the flip side, Irani said it's vital to also bring in new blood with fresh ideas. "I've heard the saying, 'To be great, you have to see greatness.' Very few people can achieve greatness without some sort of role model or seeing it in someone else," he said.

That led to the hirings of Bhavesh Shah as vice president of technology, and Gary Niernberger as vice president of purchasing.

Another lesson learned—one perhaps caused by high turnover—is that sometimes you have to give talented people a chance, even if in the traditional sense of career progression it may not seem like they are ready.

Claude Dupuis is one example at Lion, who was viewed as a potential director of EPDM.

"But we promoted him to the VP of sales, and he's really blossomed and (has) done fantastically well," Irani said.

And there's John Komidor, vice president of EPDM.

"He's a younger guy who, on the traditional trajectory, probably needed another five to six years to get into the position he is in," according to Irani. "But the potential is there, the capability is there. I took the chance to put him in that position and he's delivered on all of the things that we needed him to do."

That approach also is key to recruiting others to live out the next chapter of their careers at Lion Elastomers.

"If you've shown talent, potential, and where you're working today is more systematic about your progression, you can come to a company like Lion," Irani said. "We're willing to take a chance on talent, and you can take a chance on us to really bloom and grow into your full potential at the pace that you want to, as opposed to the pace of the standard corporate career ladder."

With this mix of internal and external talent, the Lion CEO said it's important to set the right tone for people to succeed.

"You have to create a culture that's cohesive, fun to work at and inclusive of different people's working style," Irani said. "Give people the right level of autonomy, but also the right level of support in their positions. And value what they bring to the table, and I've tried to do that."

There are some things Irani has looked to install at Lion that are different from what was practiced at ExxonMobil. With an integrated company as massive as ExxonMobil, there is a need for systems and processes—but those can be stifling, he said.

He didn't want that to happen at Lion, the notion of overburdening the organization with systems for everything.

"To stay nimble and to empower people to bring their creativity and their innovation to the table," Irani said, "we have to give them some freedom to operate, and also evaluate if there's exceptions to the rules sometimes. And that's the balance that we're trying to bring as a leadership team at the company."

One thing that Irani has found in his year at the helm of Lion is that it's a lot harder to implement change than he ever imagined.

"This is a human nature comment, not directed at any companies or individuals. But our nature as humans is to figure out how to do something, and then put it on cruise control and never think about it again," he said.

"And the hardest thing I've (had) to do is to take people out of cruise control to show them how doing something a different way actually saves them time. Because the initial effort of learning that new way to work takes more time than the way they used to do it."

He discovered that a lot of processes at Lion are quite manual, and he thought if he could make a digital paper trail or reduce the steps to accomplish something, that people would welcome it.

But that hasn't been the case.

"You have to get buy-in," Irani said. "You have to drip it on the organization so that they hear about it over and over again, and then it starts becoming part of the language. But what I learned is that, at some point, you just have to force it to happen."

Progress has been slower than he hoped for, but he blames that on the general turnover that most companies are facing.

One of the first areas stabilized was human resources, where some staffing changes occurred, along with an updating and standardizing of policies.

Irani does think the turnover problem has slowed somewhat. He said the Geismar plant has been hurt in its efforts to attract younger workers because of all the plant expansions in the Baton Rouge, La., area.

In general, it's true that some talent isn't interested in the rubber or petrochemical industries.

"When I first got out of college to work in the plants, the plant jobs were prized positions," Irani said. "And that's just not the case anymore. They are still valued among some young people coming into the work force, but it's definitely dropped below some areas such as IT and marketing. The chemical industry used to attract entry level talent, which now companies like Amazon are taking to work in their warehouses."

With its other synthetic rubber manufacturing locations in Orange and Port Neches, Texas, Lion has tried to strengthen its relationships with local universities and technical schools, and has even started working with local high schools.

"One thing we've re-realized is that the locations where our plants are, the people who grew up in that area, they actually want to stay in that area," he said. "It's where their families are, it's where their friends are. And to find gainful employment in those areas, the plants are still some of the best places to do that."

Though the Lion name hasn't been around that long, the sites and products themselves have a long history in the synthetic rubber sector.

United States Rubber Co.—the forerunner to Uniroyal Chemical—began making emulsion SBR at the Port Neches facility in 1942, an outgrowth of the World War II U.S. Synthetic Rubber Program. The then-named Lion Copolymer purchased that site from Ashland Chemical in 2014.

U.S. Rubber also started making Royalene-brand EPDM at the Geismar site in 1964. After a number of ownership changes, Lion acquired that business in 2007.

And in 2019 it bought the Orange factory from Firestone Polymers, an operation that dated back to 1961.

Lion now boasts a product line that includes standard and specialty EPDM; emulsion and solution SBR, along with specialty SBR; polybutadiene rubber; and styrene block copolymer elastomers.

"I think as other players come and go, we are going to stay. We are going to be here," Irani said. "Customers can rely on us to supply them and we're going to continue to innovate.

"The way our plants are structured, the way our culture is structured, it's to serve the customer, and it's to produce the types of products that they need to solve their problems."

During the IEC in Knoxville, Lion had several discussions with customers about designing new products specifically for them, something the Lion CEO doubts the other large players in the SR industry would undertake.

Bringing in Shah as VP of technology is key to helping customers with new innovations, Irani said. Plus, Solomon Tang, a research fellow, has been a premier scientist in the field for decades.

Lion also has expanded and upgraded its pilot facilities, all located in Geismar, a project that will aid with these kinds of projects, which by design won't give quick paybacks.

"That's always been our mindset," Irani said. "We're long term in rubber. The projects we're working on today, the products we're looking to design, they have a long-term horizon."

Some areas of innovation include TPV feedstocks on the EPDM side; viscosity modification for greases, gear oils or motor oils; targeting new industries with its butadiene rubber; and expanding its styrene block copolymer line.

Lion also is nearing an "economic go or no go" on its announced intentions to start NBR production at its Port Neches facility. Irani said it's more a "when" rather than a "whether" decision, but logistics on delivery time for necessary machinery has caused some delay.

"We believe a domestic supply of NBR really helps the industry and our customers," he said. "You see with all the shipping issues that have occurred on the NBR front, that's caused a lot of heartache for our customers."

And its $22 million expansion at Geismar should be in place by the end of this year, according to the Lion CEO.

Looking to next year, Irani said Lion expects revenues to be flat vs. 2022, closely correlated to what customers are expecting.

The large majority of its business comes in the Americas, but that could change somewhat with its strategy for growth in key areas like TPV feedstocks, hot rubber adhesives and lubricant viscosity modification additives.

"These are global specialty markets where our products are globally unique, and we'll be looking to serve our customers no matter where they're at," Irani said.