Air Products CEO Discusses Company’s Commitment to Lehigh Valley (VIDEO)
By Colin McEvoy on June 10, 2016
Speaking before about 200 business and community leaders, Seifi Ghasemi left no room for ambiguity: the future of Air Products remains in the Lehigh Valley, and that is not going to change any time soon.
“We are committed, as long as I’m the chairman of the company, that our headquarters will be in Allentown,” said Ghasemi, chairman, president, and CEO of the Fortune 500 company. “We’re not going anywhere. I can’t think of a better place to have the headquarters of the company.”
Ghasemi spoke to a sold out crowd at the Greater Lehigh Valley Chamber of Commerce’s Spotlight Event on June 10 at the Saucon Valley Country Club, where he discussed the company’s goals, its growing profit margins, his leadership style, and changes he has made since taking the helm of Air Products in July 2014.
One of the four major industrial gas companies in the world, Air Products is at its best when focused on industrial gases, Ghasemi said. That, he said, is why the company announced last year it would spin off its performance materials and electronic materials divisions.
Responding to questions about whether those spinoffs would result in a loss of jobs for the Lehigh Valley, Ghasemi said the impact will be minimal. Evonik, which Air Products sold its performance materials division to, has publicly committed to running the company in Allentown, he said.
Ghasemi acknowledged that some jobs in the electronics materials division, which will soon be spun off as Versum Materials, is relocating some jobs and laboratories to the West Coast because 80 percent of that business is in Asia. But he also said it is continuing to maintain a plant in the Lehigh Valley.
“With respect to industrial gas, our core business, we are not going anywhere,” he said.
Air Products has $10 billion in sales and a more than $30 billion market cap, employing 19,000 workers and maintaining more than 750 production facilities in over 50 countries around the world. The company has more than 170,000 companies and 1,800 miles of industrial gas pipeline.
Air Products’ profit before taxes and depreciation in Q2 2016 was 35.1 percent, an improvement over 25.1 percent in Q2 2014. That exceeds the other major industrial gas companies, Ghasemi said, including Praxair (33.3 percent), Air Liquide (26.1 percent), the Linde Group (23.3 percent), and AirGas (18.3 percent).
“We are now the most profitable industrial gas company in the world,” he said. “And this is the best measure, because it’s against the same people who are in the same business.”
Ghasemi said the only sustainable element of competitive advantage that any company has is the degree of motivation and commitment of its people. Air Products cannot depend solely on having bigger buildings, better plants, and superior technology, because its competitors can ultimately obtain those things as well.
“The only thing that’s going to make a difference is how committed and how motivated our people are,” he said.
Ghasemi said Air Products strives to be the safest and most profitable industrial gas company in the world, providing excellent service to its customers. He said the safety of its employees is the company’s important priority, and is achieved by ensuring equipment is in good condition and employees are well-trained.
“That is a fundamental moral responsibility we have that takes priority over everything else,” he said. “Every single industrial accident is preventable. There is no such thing as unpreventable accidents.”
One change Ghasemi made is breaking the company into more than 40 profit centers, and each gets rewarded with bonuses based on what they accomplished. It is unfair for a part of the company in Korea that performs well to receive the same bonuses as another part in another part of the world that loses money, he said.
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