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The chemistry's right.

Emerson Kampen, CEO of Great Lakes Chemical Corp.

Mornings at the Bluebird Cafe in downtown El Dorado, Ark., there was a lot of talk about "The Bottle Man." A trucker changing a flat near an oil well pond out toward Smackover saw the bear-of-a-stranger dip water into a little medicine bottle. A fisherman casting in a stream watched the six-foot-four man do the same thing. A widow lady reported he'd stopped by her place, walked out to a puddle by a petered-out old pumper, filled a little glass tube from a rusty pipe and marched back to his car.

He didn't look like some kind of crackpot. He was more like a town-dressed vacationer who'd parked his wife and two kids in the hotel, left at dawn and went out wandering around. Nobody could guess where he'd turn up next or what he was up to, but there were a lot of theories. Maybe he was scouting land for a summer house. Maybe he was a state health inspector who knew things he wasn't telling yet. Maybe he was prospecting for something.

Those who presumed "prospecting" were right on. Emerson Kampen was a modern-day alchemist searching for red gold. He was on the trail of the brine, salt, sodium chloride, good old NaCl, from which his company could produce the element bromine. It's the stuff of which his firm controls a 70 percent share of the world's market. It's the stuff that convinced his corporation to build the largest bromine processing plant in the world at El Dorado, 10 miles south of the Ouachita River in the defunct oil fields of southern Arkansas.

That productive "vacation" trip is a 33-year-old memory. It happened shortly after Great Lakes Chemical Corp. moved from Michigan to West Lafayette with the idea of being near Purdue University's facilities. In those days, Kampen was a mere chemist among chemists. Somehow, management got wind of a mother lode of subsurface water containing bromide and he hightailed southwest to snoop. He found it and gave his firm a jump on the giants, Monsanto Co. and Dow Chemical Co. Great Lakes zoomed away and never looked back.

Today, Emerson Kampen is chairman of the board, president, CEO and one of the largest shareholders in the 58-year-old company. These titles were not heaped upon him simply because he is an outstanding water sampler, but rather because of the things he has helped his company to do.

Great Lakes operates 13 subsidiaries and joint ventures at 126 sites worldwide and markets a bundle of more than 2,000 products. One of eight Fortune 500 companies in Indiana, Great Lakes had $1.1 billion in sales in 1990, and in the first nine months of this year, sales were up nearly 25 percent over the same period of 1990. Among Fortune 500 chemical companies last year, Great Lakes was second in sales growth and profits as a percent of sales.

As a New York stock analyst explains, "They take pedestrian compounds and broaden their application. They seem to find a use for the useless. Emerson Kampen is personally involved in the R&D effort, which comes up with a fine array of new products every year. Their style is to develop innovative derivatives, pioneer new uses and discover promising niches. Over the past decade the firm has acquired a new company practically every year and melded it into its expansion plans."

Kampen explains that acquisition is part of the firm's strategy. "In the last five years we have grown 35 percent per year in both sales and in earnings. It's almost impossible to grow internally that much, especially when you get to our level. That would mean you'd have to grow roughly $500 million a year. It is difficult to develop new products to keep up that kind of growth. So, while we don't try to stick by any set formula, I would like to see a pattern that is about half internally generated and half through acquisitions that fit our business."

Bromine is the company's core and historical business. At El Dorado it is pumped up from miles-deep pools into a tower, is heated and injected with chlorine. The bromine turns into a gas that is condensed into a pure burgundy liquid.

As the world's leader in brominated flame inhibitors, Great Lakes offers three times as many products as its nearest competitor and holds at least half of this $400 million market. One successful line helps protect valuable assets because it extinguishes fires without inflicting water damage. This is important to everyone from telecommunications and computer manufacturers to commercial and military aircraft builders. It also is important to environmentalists, because halon, the old standby fire-extinguisher chemical, has an adverse affect on the ozone layer.

A bromine product helps oil- and gas-well operators by supporting the well bore, controlling hydrocarbon flow and carrying away cuttings. In some cases it increases well production by as much as 40 percent. The fluid is used for offshore drilling in Alaska, the North Sea and along the Gulf Coast.

Fumigants using bromine can curb insect infestations of produce and plants, and thus are a boon to high-value vegetable and fruit growers. The company entered this market 30 years ago and has since developed 20 proprietary products that are widely used on 1,200 different cash crops around the world.

Bromide also cleans and purifies water in industrial wastewater lagoons, municipal and industrial wastewater systems, in once-through cooling systems and in recirculating cooling towers. More-stringent enforcement of the Clean Water Act and other legislative guidelines creates vast opportunities for bromine technology. In the United States, industry pumps more than 325 billion gallons of water a day through cooling, manufacturing and waste-treatment systems.

The firm also has moved bromine from industrial applications to home use. Great Lakes markets a full line of chemicals and equipment for swimming pools and spas. It sells Purex pool products and equipment including pumps, filters and heaters. Its Aquabrome brand, formulated to replace chlorine as a sanitizer, offers a special advantage--it does not burn the eyes.

Great Lakes Chemical also has 50 percent of the $250 million market for furfural. The product is an oily liquid made from agricultural waste such as corn cobs, grain hulls and sugar cane bagasse. Great Lakes owns QO Chemicals Inc., once a waif of the Quaker Oats Co. and now the largest furfural producer. Great Lakes converts this post-harvest litter into plastic resins and furfural alcohol used by the world's foundry industry to make sand cores and molds for metal casting. It has additional high-growth applications in such areas as a urethane intermediate, in solvents and textiles.

Under Great Lakes' annual-report heading of "Diverse Businesses" is Octel Associates, a London-based company with strong activity in the European market. Great Lakes bought a majority interest in 1989 and just last October raised its holding to 88 percent. Octel's Amlwich facility in Anglesey, U.K., manufactures 95 percent of the bromine produced in Europe. It has other facilities in France, Germany and Italy. Octel is one of the world's leading producers of octane-enhancing fuel additives for leaded, antiknock gasoline. It also is said to have numerous products on the shelf that are expected to boost Great Lakes' earnings down the road.

"This gives us a new field of chemistry to work in," says Kampen. "Now we have a number of new projects and an engine laboratory in England with 150 employees who look at new ways to cut down on pollution and give better performance."

Another development that has industry analysts excited about Great Lakes' future is a new crop spray now being tested. Known at this point as "Cryoban," the potential blockbuster product is designed to protect sensitive crops such as tomatoes from the ill effects of frost.

Though much is happening at Great Lakes, the company is, perhaps, better known on Wall Street and around the world than in West Lafayette and Indiana. One reason is that Great Lakes has no big manufacturing plants in Indiana and of the firm's over 6,000 employees only 300 work in the state. The corporate headquarters just outside West Lafayette handles administration and research and development.

International operations account for more than 60 percent of Great Lakes' total revenue, so Kampen's view of the world is significant. "Expansion is going to happen in a lot of new product areas," he says. "In Europe the use of bromine is about one quarter of a pound per person. In the United States that number is as high as two pounds. The technologies we have developed here, we expect to use worldwide.

"I look to the Pacific Rim," he continues. "A few years ago I made a trip to China and at one of the agricultural universities I told them that I felt our corporation could put $4 billion of revenue on the bottom line in China using bromine-chemical technology. It all depends on how fast industries develop in those countries and how willing they are to accept new methods of growing crops. I expect the Orient to be a major market for us.

"The United States represents only 3 or 4 percent of the world population. We have the rest of the world as a potential market for the full gamut of the products we make."

Says a stock analyst: "Kampen's major challenge is to maintain the entrepreneurial stance of the company and continue the drive that has made Great Lakes seize business opportunities." Kampen is not letting any moss gather.

Emerson Kampen, now 63, was born in Kalamazoo, Mich., into an immigrant Dutch family with nine children. The only one of his brothers and sisters to attend college, he got a bachelor's degree in chemical engineering from the University of Michigan in 1951. He married 40 years ago and has seven children.

He joined Great Lakes Chemical in 1951 and when he signed on, the company was at the edge of bankruptcy. "Not a very solid foundation," he recalls. "It had 13 employees, sales of $150,000 a year and difficulty meeting the payroll. That was the golden age of chemistry. Good jobs were plentiful, but I took this job because it was located where my wife and I wanted to live. It certainly turned out well through the years and gave me an opportunity to grow that I never would have had if I had gone to work with one of the major oil or chemical companies." His first promotion was to plant manager. Then, after several vice presidencies, he moved to president and a director in 1973 and became CEO in 1977. He has guided the company for the past 18 years, building it up from a less than $50 million operation to a more than $1 billion company today.

Kampen characterizes himself as an "operations person." He says, "That means one who likes to get the biggest bang out of every buck we spend." Sometimes he does laboratory work himself.

For instance, when he took those first samples of salt water from Arkansas, he sent them to three different laboratories to be tested. One at a university reported the water had 7,000 parts of bromine per million. Another reported 10,000 parts per million and another said 3,000 parts. He didn't know which report to believe, so he went to the library and checked out books on how to test. "It was a fairly complex process at that time," he recalls. "But I did my own run and came up with a number of about 4,400 parts per million. It turned out my numbers were right and theirs were off.

"For $13,000, I built a cracking unit to make ethylene. The lowest price we could get for the unit from suppliers was $300,000. Our company in no way had that kind of money to spend. I'm an operations man but I also like to think I'm a good salesman and a businessman who looks after every dollar."

Kampen gives credit to his very strong management team, and says, "It is a question of hiring people who have the drive and the work ethic. The example set by top management should filter down to the troops, so to speak. Our corporate culture is 'Can do!'"

One management "example" is a six-point creed engraved on brass plaques fastened to the wall in his office and in the reception room. It is titled, "Winners vs. Losers," and it contains such tidbits of wisdom as "The winner sees a green near every sand trap; the loser sees two or three sand traps near every green. The winner is always part of the answer; the loser is always part of the problem."

Says Kampen: "I believe how a person thinks is absolutely crucial to how far he can go." He adds one more bit of philosophy: "Success has many claimers but failure none."

You might call Kampen frugal, and he definitely is not ostentatious. He waves his hand around the room for emphasis and claims, "There isn't one piece of new furniture in this office. It all dates from when I inherited it in 1972. People joke but I think it is still pretty darn nice. I don't need to change every year or even 10 years. It doesn't give me a great thrill. We're outgrowing our space, so we'll have to build a new office building. A new office building is fine, but I'd rather spend the money on a new plant that is going to produce a product that will produce a return."

Kampen is more than openhanded with his management skills. He generously contributes to Indiana as a member of 12 boards of directors in business, government and industry groups. Some are Lafayette Life Insurance, Lafayette National Bank, INB Northwest, Hoosier Alliance Against Drugs and the Indiana Chamber of Commerce. He was a trustee of Indiana University for years and is now on the board at Purdue University. He and other board members of PSI Resources of Plainfield are credited with helping revitalize the state's leading electric utility. As a board member of Inland Steel Co. he participated in the turnaround of that important basic industrial business.

After a long and cordial talk, Kampen gives a hearty chortle, a draw-back-a-stub handshake and an invitation to come see him again soon. You'll honestly want to. The chemistry's right.
COPYRIGHT 1991 Curtis Magazine Group, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Special Feature: Industrialist of the Year; Emerson Kampen, chief executive officer of Great Lakes Chemical Corp.
Author:Johnson, J. Douglas
Publication:Indiana Business Magazine
Article Type:Company Profile
Date:Dec 1, 1991
Previous Article:Greetings from Bloomington.
Next Article:Indiana's all star stocks.

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