Issue Date: March 5, 2007
Raj Gupta to Receive SCI Medal
LATER THIS WEEK, leaders of the U.S. chemical industry will reaffirm their faith in the growth and continued prosperity of their business by awarding one of their own the coveted Chemical Industry Medal. Raj L. Gupta, chairman, president, and chief executive officer of Rohm and Haas, will receive the award from the American Section of the Society of Chemical Industry (SCI) at a dinner in his honor in New York City. Gupta is the 74th recipient of the medal.
Headquartered in London, SCI aims to further the application of chemistry and related sciences for the public benefit. And Gupta, 61, will receive the award to recognize his commitment to the success of the global chemical industry.
"Throughout his career," SCI says, "Gupta has encouraged both his company and others to hire the best possible people, to always behave in an ethical and responsible manner, and to promote a wider understanding of the benefits the industry's technology brings to everyday life." Gupta tells C&EN that he also is optimistic about the great number of beneficial new products yet to come out of the chemical industry.
Gupta has an international perspective that is a product both of his education and his career. He was born in Muzzaffarnagar, India, where, he says, his father's dream for him was to become a mechanical engineer. In 1967, Gupta completed training in that field at the prestigious Indian Institute of Technology in Mumbai.
Soon after, he received a fellowship to pursue a degree in operations research at Cornell University in Ithaca, N.Y. He arrived in the U.S. with $8.00 in his pocket and the winter coat on his back.
"Most Indian immigrants of the time would relate to that story," he says. The Bank of India placed strict controls on currency leaving the country. By the time he had arrived in Ithaca and taken a taxi to his living quarters, he had $2.00 left, he says. The university soon gave him a $200 advance on his fellowship.
Gupta recalls that at one time, his plan was to go back to India with a Ph.D. in operations research and to teach. But the work was so theoretical that he decided instead to complete his master's degree and apply what he had learned to the business world. In 1969, he joined Philadelphia-based Scott Paper, where he worked in the strategic planning department and became skilled at financial modeling. He also pursued an M.B.A. at Drexel University at night.
In 1971, Gupta joined Rohm and Haas as a financial analyst in order to take greater advantage of his degree from Drexel. "Actually, I hadn't heard of Rohm and Haas until a financial recruiting firm suggested I go and talk to company executives," he says. "Rohm and Haas always had a low profile," he adds. That Rohm and Haas also had operations in India was attractive, as he still harbored hopes of going back east.
By the end of the decade, however, Gupta was working for Rohm and Haas in Europe, eventually becoming the global director for plastic additives in 1989. By 1993, he was a vice president directing the company's operations in the Pacific region, including India. He joined the firm's board in 1998 and became chairman and CEO the following year.
Vincent A. Calarco, retired chairman of Crompton, now known as Chemtura, recalls that Gupta was a quick study among his peers. Within a few years of taking on the CEO job at Rohm and Haas, Gupta became chairman of the American Chemistry Council, the trade organization of the largest U.S. chemical makers. In 2004, he dived into the time-consuming search for a new ACC president when Gregori Lebedev stepped down after a short tenure. Gupta also helped put ACC on course as an advocate for the industry, Calarco says.
Sunil Kumar, president and CEO of International Specialty Products, says Gupta was accessible to all members as ACC chairman. "He encouraged a lot of debate and opposing views. That is not a common thing, and because of it, he helped reinvent the ACC," Kumar says.
Gupta says he has seen the industry change dramatically since joining Rohm and Haas 35 years ago. In 1971, the chemical industry was a growth industry. "If we didn't grow 6 to 8% a year, there was something wrong," he says. "That was the rule of thumb for every chemical company then, including Rohm and Haas."
Like its competitors in the early 1970s, Rohm and Haas engaged in a variety of businesses, including plastics, health care, fibers, and agricultural chemicals. Almost all of the firm's sales were either in the U.S. or Western Europe. Asia and Latin America were thought of only as markets for surplus products.
BUT TODAY the chemical industry "clearly" has matured in the U.S. and European Union, where growth rates are only about 3% a year, Gupta says. The developing countries of Asia and the rest of the world are where the action and the 6 to 8% growth are now.
As a result, Western chemical companies have a more global perspective, Gupta notes. And most firms are more specialized. Rohm and Haas, for example, has "focused on the acrylics chain; built electronics and specialties platforms; and got out of fibers, health care, and agricultural chemicals," he points out.
The industry has consolidated, and the surviving companies are many times larger than they were 30 years ago. Rohm and Haas, for instance, bought the specialty chemicals maker Morton International and firms in electronic chemicals such as Rodel and LeaRonal.
"When I joined Rohm and Haas, our revenues were $450 million, our earnings were about $25 million, and we had about 16,000 employees," Gupta says. In 2006, the firm still had about 16,000 employees, but revenues had grown to $8.2 billion with earnings of $755 million.
Government regulations have taken their toll on the industry, Gupta says. Many of those regulations, he acknowledges, came as a consequence of well-known incidents such as the gas leak that killed thousands in Bhopal, India, and the discovery and subsequent clean-up of a chemical waste dump under a residential community at Love Canal in upstate New York. But Gupta maintains that "this is a very responsible industry" that has taken steps to prevent similar catastrophes in the future.
Government regulations will continue to affect the industry, Gupta predicts. "There is no question in my mind that the next big thing for our industry is the impact of our products on human health and safety." The European Union's recently authorized chemical regulation-known as REACH, for registration, evaluation, and authorization of chemicals-will be adopted in some form or other worldwide, he predicts.
"Nobody should think the industry is not in favor" of making sure chemicals are used safely, Gupta says. The debate with regulators over the REACH program has more to do with chemical test procedures. What the industry needs, he says, is a set of practical testing parameters that it can perform at reasonable cost.
Environmentally friendly solutions to societal needs are where the chemical industry's future opportunities lie, Gupta says. Aside from the potential for sustainable or biomass-based raw materials, he sees opportunities for the chemical industry to develop products that purify water, save energy, enhance building construction, and improve electronic devices. The challenges ahead include a lack of growth in mature markets, rising costs, regulations, and disruptions in the lives of employees affected because of industry restructuring.
But because they know how to access talent and work with a diverse group of people from around the world, U.S.-based firms like Rohm and Haas "have a lot to build on," Gupta says. "The opportunities ahead for U.S. chemical companies are enormous."
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