Foundations for Growth in a Turbulent World: An Interview with Sandip Tyagi, CEO of Flexsys
September 27, 2022
Flexsys, a leader in specialty chemicals for the tire industry, with a global asset footprint, superior technical and innovation capabilities, and exceptional customer service, will soon celebrate its first-year anniversary of becoming an independent company.
The business was acquired by an affiliate of One Rock Capital Partners, LLC on November 1, 2021, and was renamed Flexsys, a tribute to the legacy name of the business, and its more than 75 years of heritage in the industry.
In preparation for the first-year anniversary, Flexsys’ CEO, Sandip Tyagi, shares his perspective on the macro environment, the industry, and on Flexsys as he leads the company through its transition from a corporate subsidiary to a strong, independent, and successful business.
TRANSITION ON TRACK
“The team at Flexsys have achieved an incredible amount since the completion of the carve-out transaction late last year, we have hired over 150 new employees, received an EcoVadis Gold rating putting our sustainability performance in the top 6% of chemical companies, and we are in the final phase of transition over onto our own business systems and processes. I am extremely proud of what the team has accomplished in such a short period of time and am truly excited about leading this world-class company on its strategic growth journey.” said Sandip.
A TURBULENT WORLD
Following roll-out of the coronavirus vaccine and the easing of lockdowns in 2021, overall economic activity improved, and tire demand returned to or close to pre-pandemic levels. The speed of the recovery pushed up crude oil prices, which then rose further with the Russian-Ukrainian conflict. More recently, energy prices in Europe surged after Russia halted its supply of natural gas via its largest pipeline to continental Europe. The dramatic rise in oil and natural gas prices in Europe drove consumer price inflation in the Euro zone in August to new record highs at over 9%, with energy inflation running close to 40%.
“2022 has been an unprecedented year for Flexsys, we have seen significant inflationary pressures across the business because of rising raw material prices in all regions, surging energy costs especially in Europe, and escalating operating costs, all of which show little sign of abating.” said Sandip. “Flexsys must offset through our pricing the effects of inflation the company has been experiencing to enable Flexsys to continue to make the necessary capital investments in its plants and support its research and development program for its pipeline of new products.”
After a strong start in early 2022, the macroeconomic situation in China has deteriorated in recent months because of Covid lockdowns, causing unemployment to rise in the service sector, resulting in supply chain disruptions and delays in the export of some products out from China. Growth momentum is expected to pick up towards the back end of 2022 helped by stimulus measures and covid restrictions being fully lifted.
“The overall business outlook in China remains quite uncertain related to the factors emanating from the Covid lockdowns and growing geopolitical tensions.” commented Sandip.
“Regardless of any such unexpected external events, we at Flexsys remain steadfast in our customer-focused approach to the market, and continuously seek to strengthen our position as a trusted and long-term partner to the tire industry.”
“Our global manufacturing and distribution network provides the industry with a high level of supply redundancy for our portfolio of critical tire additives, and to further strengthen our value proposition and support our ‘local-for-local’ supply philosophy we have successfully executed a number of projects to unlock additional Insoluble Sulfur and Antidegradant capacity.”
“We are relentless in our pursuit of providing our customers with exceptional supply security and service, deep technical support, and breakthrough innovative products that help tire manufacturers improve their operations while enabling them to execute on their sustainable growth plans.” said Sandip.
“These traits have been the hallmark of this business since 1944 when Crystex™ was first introduced which helped revolutionize the tire production process.” Sandip went on to say.
A BRIGHT FUTURE
As the automotive industry moves into a new chapter and heads towards carbon-neutral mobility, this will create new challenges and opportunities for the tire industry.
“Flexsys has always been at the forefront of bringing innovative and valued products to market, and we continue to invest heavily in the research and development of our pipeline of new products that align to the needs of our customer needs.” said Sandip. “I am particularly excited by the work the team has been doing on the next generation Antidegradants.” said Sandip.
“Flexsys’ reputation is built from having a solid foundation of great people, great products, world-class operations, and an unwavering customer focus, and now that we have made the transition over into an independent business, I am confident that we will be able to realize the full potential of Flexsys as we execute on our organic and inorganic growth programs.”
Flexsys is the world’s leading producer of high-quality rubber chemicals and solutions, including Crystex™ vulcanizing agents, Santoflex™ antidegradants, and Duralink™ HTS post-vulcanization stabilizers. Flexsys operations span four continents, with eight manufacturing facilities and two technology centers.