Chemical attraction

It’s founder’s ability to see into the future has helped Chemtools ensure it will be sticking around for the long term. By Tracey Porter

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In 2003, Okay Technologies head Jean-Raymond de Villecourt made one of the smartest decisions a business owner can make.

Recognising that the 10-year-old company’s long-term viability relied on his ability to future-proof, de Villecourt made the bold but brave decision to diversify.

Starting with the familiar, he began by entering a private label agreement with Heinelec, a company associated with the electronics industry.

While the range was small, consisting mostly of circuit board cleaning products and items such as flux removers, of more importance was that the new partnership highlighted other growth opportunities for the business.

Until that point, Okay Technologies relied upon supplying electrical equipment and accessories to the industrial, mining, automotive, marine, electrical, electronics and metal fabrications industries. It was time for a change.

STARTING FROM THE GROUND UP

Within just a few years, de Villecourt had switched focus completely.

First to go was the company’s name which was reborn under the moniker Chemtools. Next, de Villecourt and his team sought to identify a niche that would help make the company’s Australian-manufactured products some of the most sought-after adhesives, welding chemicals, aerosol and bulk lubricants, cleaning chemicals, and electronics production aids on the planet.

At the time, de Villecourt says most of the chemical-related products used in Australia were either imported or made locally by European and US-owned companies.

“We wanted to establish an Australian-owned and manufactured range of products which were of good quality and competitive in price with the imports,” he says.

“It took several years to research and identify what was required in the market and then to gain the understanding and knowledge of how these chemicals were formulated. However, having started from the ground up, our knowledge base is undoubtedly better than most of our competition.”

A MULTI-NATIONAL BUSINESS

Today, Chemtools boasts an assortment of manufacturing and distribution sites across Western Sydney, New Zealand and Singapore.

It has over 500 individual products with its brands incorporating everything from GalMax and Corrofi x to Rapidstick and Kleanium.

From a commercial standpoint, industrial aerosols and paints generate the most revenue. Industrial chemicals and its extensive range of adhesives round out the company’s largest profit generators.

Presently the only company in Australia that manufactures locally made solder paste, Chemtools is also a recognised and approved training provider for Institute for Printed Circuits (IPC) related soldering and rework courses.

“We are a homegrown company that has amassed a comprehensive knowledge of the market and the products required. In addition, we can identify and respond to trends, without waiting for decisions from remote HQs,” he says.

“We have a fl exible ordering policy which allows our distribution to tailor their requirements to meet best pricing levels and our big plus is we are Australian made. Having local support in most geographical locations enables us to get closer to customers and the issues and opportunities they face.”

OVERCOMING CHALLENGES

In terms of its labour force, Chemtools remains privately owned, with de Villecourt both a majority shareholder and the company’s managing director.

Michael Gouldsmith is also a majority shareholder and the group chairman while the company’s sales director Mark Smith retains a percentage of the shareholding.

De Villecourt says the company operates a strong and loyal workforce which would be larger were it not for current labour shortages impacting the sector. This has forced the company’s hand when it comes to automation, he says.

“We currently have around 45 employees and would add more if we could fi nd skilled and reliable labour. However, our experience over the past few years has not been good.

“Our focus has always been to look for automated improvements in our production capacity and given the problems with labour, this policy has accelerated in the past 18 months to the extent that even with potentially longer ROIs, we have no other choice.”

As with most of its competitors, the COVID-19 pandemic also left its mark, fundamentally changing the way Chemtools does business. de Villecourt says during the COVID period and for some time after, the company was affected by raw material shortages.

But lessons were also learned with the company showing its agility in getting around the problem by changing some of its chemical formulations. While this extended the company’s delivery period to its customers, it also motivated staff to look for “backup” strategies should these events reoccur, de Villecourt says.

THE WAY FORWARD

Looking ahead, de Villecourt says Chemtools aims to consolidate and improve its market penetration in Australia by expanding its regional support staff and engaging in strategic partnerships with buying groups.

The longer-term plan involves working on accelerating its growth in overseas markets—particularly across the Tasman—where de Villecourt says it sees “significant opportunities. [We’d also like to increase] our foothold in Singapore and Malaysia. Planning will also include reviews of our product lines, consolidating our manufacturing and distribution in one site and embarking on focused marketing campaigns to enhance the value of our brand.”