Great Lakes chemical company history
Great Lakes Chemical was originally founded as an oil and gas exploration company called the McClanahan Oil Company. Its founder, W. L. McClanahan, established the company to take advantage of a growing oil industry centered near Mount Pleasant in central Michigan. The company remained small for many years, restricted both by competition from larger companies and limited oil reserves in Michigan.
In 1946 Charles Hale, a geologist and Wall Street financier, became the largest shareholder of the McClanahan Oil Company and later assumed its presidency. As part of his goal to create a natural resources conglomerate, Hale engineered the company’s acquisition of the Great Lakes Chemical Corporation in March of 1948. Great Lakes Chemical held titles to oil and gas reserves, as well as some bromine wells near Filer City, Michigan. In May of 1950 the two companies merged to form the Great Lakes Oil & Chemical Company.
During the 1950s Great Lakes expanded its petroleum interests by purchasing the Olds Oil Corporation in December of 1951 and the Cleveland Oil Company in October of 1952. These companies were later merged with Great Lakes Oil & Chemical as part of a program to rationalize production. The company’s ability to compete in its traditional petroleum markets began to erode during the late 1950s. Faced with impending bankruptcy, Great Lakes was forced to alter substantially its business strategies.
Earl T. McBee, a professor of industrial chemistry at Purdue University and a consultant to Great Lakes since 1953, advocated the company’s gradual withdrawal from the petroleum industry, favoring instead the expansion of its bromine operation. Charles Hale agreed with McBee and in 1957 authorized the sale of the company’s oil properties in California. Through the sale of additional California real estate during 1960, Great Lakes raised enough capital to purchase a 50 percent share of Arkansas Chemicals Inc., which owned several bromine-rich brine wells in Arkansas. As a result, Great Lakes became a major bromine products company by gaining a stake in the best deposits before the industry leader Dow Chemical could do so.
The company changed its name to Great Lakes Chemical Corporation on May 9, 1960, and continued its reorganization process by attempting to diversify into financial services. The venture was unsuccessful, however, and was discontinued in 1963.
At the time, the largest application for bromine was ethylene dibromide, an additive to leaded gasoline. Ethylene dibromide, however, was a simple commodity chemical with a low profit margin. In an effort to create a line of more profitable specialty chemicals, Great Lakes Chemical devoted 5 percent of its sales to develop new bromine compounds in a joint venture with PPG Industries. Applications were found for bromine in a wide variety of products, including biodegradable soil fumigants and herbicides, dyes, cleansing powders, synthetic rubber, refrigerants, photographic papers, and flame-retardant additives for plastics.
In 1969 Great Lakes Chemical purchased the Cavedon Chemical Company and the Microseal Corporation, in addition to Lunevale Products Ltd. of Lancaster, England. The following year Great Lakes Chemical formed a joint venture with Pechiney Ugine Kuhlmann of France called Sobrom. Sobrom was established to develop brominated soil fumigants for the European market. The company increased its presence in France in 1972 when it formed another company called Microfral with Compagnie Françs des Lubricants. Through these companies, Great Lakes Chemical enlarged its marketing network on an international scale.
In 1973, Earl McBee died of a heart attack. He was succeeded by Emerson Kampen, an employee of many years who gained a reputation for strong central management. Kampen continued many of McBee’s policies, including that of cooperation with French companies. In February of 1976 Great Lakes Chemical agreed to form an American joint venture with Pechiney Ugine Kuhlmann called the Forex Chemical Corporation, which was established to develop fire extinguishing compounds.
In the latter half of the 1970s, other chemical manufacturers accidentally released bromine fire retardants into rivers, causing cattle to be poisoned in Michigan and raising questions about the safety of these retardants in children’s pajamas. Great Lakes Chemical maintained that its bromine products were safe, but it was forced to observe costly new regulatory measures imposed on the industry.
Great Lakes Chemical had become highly profitable, taking advantage of higher demand and new applications for bromine. The company nearly doubled its brine reserves near El Dorado, Arkansas, when it purchased the bromine operations of Northwest Industries’ Velsicol subsidiary in 1981. In doing so, Great Lakes Chemical prevented competitors like Dow and Ethyl from increasing their bromine assets. The Federal Trade Commission, however, filed suit to prevent the takeover on antitrust grounds. After several years of litigation the matter was finally settled in March of 1984, when the FTC agreed to permit the takeover on the condition that Great Lakes would license its technologies to PPG Industries, in order to make it a “viable competitor.”
In 1984 the federal government banned ethylene dibromide for non-fuel uses. As a result of the ban, Great Lakes Chemical only lost 2 percent of profits; however, the increased use of unleaded gasoline during the late 1970s forced the company to de-emphasize production of ethylene dibromide.
To compensate, Great Lakes Chemical chose to expand into biotechnology and in 1982 took control over the Enzyme Technologies Corporation. Another promising area for expansion was oil field chemicals. Clear fluids containing bromine salts are effective agents in flushing oil out of the ground. In July of 1982 Great Lakes purchased a fluids company called Mobley Chemical and in October acquired a 63 percent share of the Oilfield Service Corporation of America.
In September of 1983 Great Lakes Chemical purchased the Inland Specialty Chemical Corporation for $10 million. The acquisition marked the entry of Great Lakes into the area of electronic chemicals, where it sought to apply its halogen-based X-ray resist technology to semiconductors.
As a result of Kampen’s refusal to delegate greater authority, five vice presidents resigned from Great Lakes Chemical between 1975 and 1984. One of those vice presidents was Kenneth Karmel, who left in 1982 to head Ethyl’s new Bromine Chemicals Division.
By the mid-1980s, Great Lakes Chemical claimed to be the largest producer of bromine products in America, largely through the benefit of licensing agreements with other companies. Although bromine chemistry accounted for over 80 percent of Great Lakes’ products, Great Lakes management denied that the company was dependent on one product. The company had several hundred different products and efforts to diversify continued.
Over the next five years, Great Lakes continued its domestic and international expansion by making seven more acquisitions. In April of 1985 the company purchased the remaining shares of Enzyme Technology Corp. in exchange for Great Lakes shares worth approximately $331,000 and all of the outstanding stock of Purex Pool Products, Inc., for almost $21 million. The Purex acquisition marked the establishment of a new specialty in recreational water treatment products. This investment was further developed with the purchase in 1990 of Bio-Lab, Inc., a manufacturer of swimming pool and spa products, for $55.4 million in cash.
In 1986, the company acquired Pentech Corp. and QO Chemicals, Inc., a furfural specialty chemicals group, for $121.6 million in cash. In the same year, Great Lakes purchased a 15 percent interest in Huntsman Chemical Corp. and an additional 25 percent interest in January 1987. In January 1995, Great Lakes divested 23 percent of its stake, retaining enough to maintain friendly customer relations. Great Lakes received a $130 million cash dividend that put the company in an even better position to continue its program of expansion through acquisition. In March of that year, the Huntsman family bought back all remaining shares owned by Great Lakes.
In 1989, Great Lakes (Europe) acquired a 51.15 percent interest in Octel Associates and its operating company Associated Octel Company, Limited, for $198 million. That interest was raised to 87.82 percent when Great Lakes purchased Shell U.K. Limited’s 36.67 percent interest.
This acquisition was a major advancement in Great Lakes’ strategy to keep “a specialty chemical orientation, leveraging strong raw materials positions, being a low-cost manufacturer, and developing high performance products.” Octel Associates was the world’s largest supplier of motor fuel compounds and Europe’s leading producer of key raw materials.
Great Lakes grew internationally over the next few years with the acquisition of Degussa AG’s chemical manufacturing facility in Konstanz, Germany; Bayrol Chemische Fabrik GmbH; LOWI, a German-based manufacturer of polymer stabilizers; and Societé Françse d’Organo-Syntheses, a polymer additives and specialty polymer producer. By 1994, Great Lakes was in the number two position in the $2 billion polymer stabilizers market. The acquisition of Bayrol had given the company access to the European and Mediterranean markets. With Bio-Lab’s presence in Canada, New Zealand, and Australia, and the acquisition of Aqua Chem to strengthen U.S. market penetration, Great Lakes was well represented in all the key markets for water treatment products.
In 1994, Emerson Kampen stepped down and was succeeded by senior executive Robert McDonald as chief executive officer and by board member Martin Hale as chairman. In the 20 years of Kampen’s tenure, the company had grown more than a hundredfold in annual revenue. His strategy of taking a “disproportionate share of the growth markets for bromine-based chemicals, both domestically and internationally” had made the company successful and continued to be its dominant principle.
By 1994, the company described itself as having operations in one dominant industry segment, but as being diversified within that segment. Great Lakes announced a reorganization dividing the company into six autonomous business units by product type: flame retardants, intermediates and fine chemicals, petroleum additives, polymer stabilizers, specialized services and manufacturing, and water treatment. Each group would include its own manufacturing, research and development, and marketing functions. The company had grown to hold plants at 32 locations in 14 states and eight foreign countries, with operations around the world. More than half of net sales to unaffiliated customers were derived from transactions with foreign companies.
Great Lakes’ bromine capacity represented 20 percent of the world’s supply in 1992. By 1995, capacity constraints were preventing the company from accepting profitable business. Strong markets for flame-retardant products encouraged Great Lakes to invest $60 million in enhancing bromine derivative production capacity. An estimated additional $40 million dollars were earmarked to enhance bromine production capacity in the United States and abroad.
On May 22, 1998, Great Lakes spun off their petroleum additives business as Octel Corp.
On 13/04/1999 the company changed it’s name to GREAT LAKES CHEMICAL (EUROPE) LIMITED
In September 2003 Great Lakes Chemical Corporation announced it had entered into a long-term strategic sourcing agreement from Dead Sea Bromine Ltd in Israel. 2003
1 October 2013 Great Lakes decided to close Amlwch plant.
In July 2005, Great Lakes merged with Crompton Corporation (formerly Crompton and Knowles) to form Chemtura, now headquartered in Philadelphia.As of 2015 the corporation employs approximately 2700 people for research, manufacturing, logistics, sales and administration. Operations are located in North America, Latin America, Europe and Asia. In addition, the company has significant joint ventures primarily in the United States.Net sales in 2014 were $2.2 billion. As of December 31, 2014, Chemtura’s global total assets were $2.7 billion.