Specialty Chemical Megatrends and Wide Moats with Ben Gliklich, CEO of Element Solutions, Inc. (NYSE: ESI)

Dec 7, 2021

Ben Gliklich, CEO of Element Solutions, leads a $5.5 billion specialty chemicals company. He shares his journey of transforming the company's strategy for stability and success. The discussion includes navigating the global chip shortage and its impact on customers. Gliklich highlights key megatrends that promise to drive future growth and elaborates on the importance of pricing power in a competitive market. He also discusses strategic M&A approaches post-restructuring, revealing insights into building a resilient, innovative company culture.

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INSIGHT

Element Solutions' Strategic Transformation

Element Solutions evolved from Platform Specialty Chemicals by focusing on fewer, high-quality industrial electronics businesses.
They built their identity around serving customers, supporting employee growth, and creating shareholder value through operational excellence.

INSIGHT

People and Innovation Build Wide Moats

The company's moat is heavily based on its people and their deep customer relationships.
Their technical support and incremental innovation create high customer stickiness and barriers for new entrants.

INSIGHT

Pricing Power Amid Supply Challenges

Despite recent global supply chain challenges, Element Solutions successfully raised prices to maintain margins.
Pricing includes contractual pass-throughs, surcharges, and negotiations, reflecting strong pricing power even amid inflation.

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My guest on the show today is Ben Gliklich, the CEO of Element Solutions (Ticker: ESI), a 5.5 billion dollar market cap specialty chemicals company. Element Solutions was formerly known as Platform Specialty Chemicals and was founded by Martin Franklin of Jarden fame—with the help of Bill Ackman from Pershing Square. The company was designed to be a roll-up but, after some initial success, it was derailed by an over-levered balance sheet. Ben became CEO in 2019 and since then has overseen a process by which Element has reduced business complexity, fixed its balance sheet, and has proven out its claims regarding its resilient margin structure.

Given that the company provides products that facilitate the fabrication of semiconductors, Element has a front row seat when it comes to all of the issues regarding the global chip shortage. Accordingly, I thought it would be a great time to talk to Ben about:

His path to becoming CEO and what he has learned about leadership along the way;
How the company is navigating all of the customer disruption tied to chip shortage;
The megatrends that are poised to propel the business over the next decade;
How the company is approaching M&A and leverage after the initial stumbles at Platform Specialty; and
From where Element Solutions derives it moat and pricing power

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