Barefoot to Billionaire by Jon Huntsman Sr

Author:Jon Huntsman Sr. [M. HUNTSMAN JON, SR.]
Language: eng
Format: epub
Tags: BIO000000 BIO003000 BIO026000 BUS000000
ISBN: 9781468311457
Publisher: Overlook
Published: 2014-10-01T04:00:00+00:00

Between 1997 and 1999, Huntsman sold most of its polystyrene, styrene monomer, and compounding plants. Polystyrene had been the foundation for the plastics products of the 1960s and 1970s. Nearly thirty years later, it was time to unload. We sold the global polystyrene business to NOVA Chemicals Corporation, the giant Canadian petrochemical company from which we had purchased several properties in the 1980s, for about $840 million. Huntsman probably had $300 million invested in those polystyrene operations, so we did well with the divestiture. Nearly $200 million was in the form of NOVA stock, making us the biggest shareholder of Canada’s largest petrochemical company. The stock later was sold back to NOVA at a tidy profit.

Seven manufacturing facilities were covered by the sale, including Belpre, Ohio, our first petrochemical plant. We retained our large North American expandable polystyrene business and styrene and polystyrene plants in Odessa, Texas and in Australia. The compounding plants (where chemicals such as fire retardants are added to polystyrene) originally were acquired in 1985 with the Georgia Pacific purchase. Ralph Andy, who remains the best partner I have ever had, was our CEO. It was a personal fifty-fifty business. I have said it many times: I know of no Huntsman enterprise that outperformed Polycom-Huntsman. The reason: Andy’s superb management and the mutual trust and respect that prevailed throughout our working relationship. Andy and I each had about $1 million invested in the business. Eventually, we sold the plants to Spartech, a publicly traded compounding company, for $135 million.

Those two sales netted Huntsman about $700 million. We used the proceeds to reduce debt and to fund modernization at Rexene. We plunked over $100 million into our charitable foundation (most of it earmarked for the Huntsman Cancer Institute). We were debt free and looking for acquisitions.

My philosophy when looking to buy a company is simple—I only want to know two things: Are there areas where efficiency can be optimized through cost cutting? And what is the worst-case scenario on the downside? We were itching for action as the century drew to a close. Boy, did we find it.

The forthcoming deal would equal all previous acquisitions combined. It would make us a world player and transform Huntsman from a traditional commodity-based manufacturer into one that embraced the successors to plastics: specialty and differentiated chemical products. Most importantly, the move would save Huntsman Corporation from what could have been a liquidation sale years downstream.

We restructured into a domestic holding company, Huntsman Corporation, with headquarters in Salt Lake City, and an international division, Huntsman International, located in Brussels and headed by Peter Huntsman. Into Huntsman International we transferred the primo propylene oxide/MTBE plant at Port Neches, Texas, acquired from Texaco in 1997. In two years, we doubled its profitability. It was now valued at around $900 million. (The purchase price was $580 million, although we pulled it off using our own brand of creative financing, which required only $25 million of Huntsman cash.) That facility would provide the equity for what turned out to be the most defining move in the company’s history.

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