Pivoting a family-owned business during a pandemic is challenging. The key is to maintain a free-form culture of growth where everyone wins. Victoria Meyer’s guest in this episode is Cameron Whaley, President of Southern Chemical & Textiles. Cameron shares with Victoria how the company thrives on taking great care of its people. Make the best opportunities available so everyone succeeds. Tune in!
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Leading A Family-Owned Chemical Business And Pivoting Through Uncertain Times With Cameron Whaley
In this episode, I'm speaking with Cameron Whaley, President of SCT, also known as Southern Chemical and Textiles, which is a manufacturer of primary and secondary source surfactants based in North America. He is a second-generation leader of SCT, which is a family-owned business. We're going to have a great conversation talking about all things going on in chemicals, family-owned businesses, etc. Cameron, welcome to the show.
Thanks, Victoria. I appreciate the opportunity.
I'm delighted to have you here.
Tell us a little bit about SCT.
SCT was founded by my father Truman Whaley on July 1st, 1984. It was quite incredible. Dad came from the chemical industry. He began his life in the lab at a local company here in Dalton, Georgia. Going to school, working in the lab and getting some experience. Flash forward to '84, he was working for Goodyear Chemical. They had an SBR latex plant in Calhoun, Georgia that he was a technical seller for. The carpet industry at that point was booming and he saw that there was an opportunity to do something different. He walks in and we're having dinner and he laid out these plans for starting a company. My mom and I looked at him like he was crazy. We had $6,500 in the savings account, rented a building and started a business. I remember climbing into an '84 Buick on July 1, driving to Anadarko, Oklahoma for a sales call. We got the sale, drove back. and made a truckload of drums. That was our first sale.
Were you there for it?
I've been there the whole time.
Make the best opportunities available so everyone can succeed.
Fast forward, you went from your dad's idea, vision and dream and got your first sale to where you are now.
It's been an absolute whirlwind. I came back to the business in 1999. We were still pretty much 100% surfactants for carpet finishing and manufacturing. Following in dad's footsteps, we saw an opportunity with the surfactants that we were making that they had used in other industries. We went to industrial and pedaled our wares, and then they found their way into the household then we had an opportunity in the early 2000s to work with a personal care company and do some blending. It was like, "We can do this. It was just another leg on the stool." That's taken off and that's now the biggest part of our business.
How is your business divided in terms of end-use markets?
It's about 85% household and personal care, maybe 2% carpet and textiles.
I guess part of this is also surviving because the carpet and the textile business in the US have taken such a hit. I don't even know how much is made anymore in the US.
It's been difficult. Textiles are making a comeback but I don't know how much carpet you have in your house so it's taken.
It’s still a little bit too much. We got some that needs to go!
It's making a comeback but it's not where it was in the late ‘90s.
You took over as president of SCT in 2015.
It was right around 2013 or 2014, that timeframe.
Tell me about what have you done. You come in and you take over. It's interesting taking over a family business because it starts as somebody else's idea and then you've grown into it. You took the leadership role in 2013, 2014. How have you changed SCT? How have you put your mark on it?
The company has changed quite a bit but it hasn't changed. I know that's difficult to convey. We still have employees that have been here since I was in high school. You take folks that have been making the product a certain way for a certain application and then you say, "We're going to make 50 different products and the different regulations. We have to be Kosher certified. We now have an organic certification. The way you do things is completely different and everyone has adapted and evolved. My leadership style is very similar to my dad's. We're a small company. We don't have 200 employees. We focus on who is doing the work for us. Our job as management or sales or whatever is to go out and make the best opportunities available so everyone can succeed.
It sounds personal. Not just because it's personally owned but because you take a real personal interest in the people, the business and customers.
Dad was hands-on. You have to be when you start something from scratch. He knows every nut and bolt in the plant, every pipe, anything. It's vastly important. Everyone sees that and they take responsibility and ownership in their job.
Let's talk about what's going on. You've been with SCT through its journey, its development, changes and leadership journey. If we focus on what's going on, the last months have been crazy in the world with COVID and the changes in the chemical industry. The demands have changed. There have been a lot of discontinuities, etc. What's been the biggest challenge for you at SCT if you look at the last months?
All of it freaked me. When all this started, I went to dad and I'm like, “What do we do here?” “I have no idea. No one's been through anything like this.” We went through the financial crisis in 2008 and you can see a little bit of that with what we’re seeing now with the increases in pricing and raw material shortages. We went through that, but having to take your team that's not manufacturing or in the lab and put them remotely, we weren't prepared for that. We have office and administration. We have HR that's onsite. To top it all off, we had opened a new corporate office right at that same time. It was perfect. We're able to delay a little bit of a renovation and slow that down, but we brought back folks.
You can dance with the elephants; just don't get stepped on.
You kept your people home for a few months but then brought them back.
We did but it was a tremendous job that everyone did. We've all learned a lot from that and people. It's a quality-of-life thing. We're a lot more understanding if somebody says,” I've got some things going on. I need to be remote.” That's great. We have the ability to do that now. It was tough on the operators and the folks that work in the plant and drive the trucks. It's keeping that motivation of, “We're essential. We're supplying cleaning products.” It was difficult to keep that motivation for as long as we did.
That's been one of the hard pieces through the pandemic and the changes in how we've worked because we keep talking about remote work. Yet the reality is if you look at many workers in the chemical industry, the operators are onsite operating the plant because they have to be. There's no other way to do it. The truck drivers and your logistics team are physically there. When you think about the mix of on-site versus remote work, a heavy portion of it is onsite. It's essential and it has needed to be.
You had the constant fear of you get one outbreak and you shut down a whole portion of your production facility for two weeks or even longer. It was somewhat terrifying. I can't complain because I have friends in the restaurant business who are sitting there listening to me and no sympathy at all because their whole business is closed and they're having to pivot. As a whole, we came through this.
What pivots did you guys take aside from having some of your employees working from home for a period of time? How did you react to any big changes in terms of your business?
We pivoted immediately to the cleaning side. There were ancillary pieces of our business that you don't think about that were negatively impacted. We have customers that do a lot of amenity lines for hotels. They weren't busy at all. You lose a little bit of that and then you make up for it. We made a lot of cleaning raw materials and we're still doing that.
The business has been strong.
It has. We had some formulas that our R&D had developed years ago. We immediately introduced formulations for anti-bac hand soaps and things that we could make available. It was, “Here's the formula. Everything was free that we published. Go make it.”
It's good that you had some resources at hand that you could quickly turn and make that happen.
SCT is a relatively small company in the chemical world. What sets you apart? How do you differentiate yourself?
My father has always said, “You can dance with the elephants, just don't get stepped on.” We're very nimble and highly service-oriented. We've been able to make our space in offering products that can be customizable and things that are scalable. When we first started diversifying the company, it was very difficult for a lot of people to understand how a small company that no one had ever heard of had such large capabilities to compete. In the industry we come from, the carpet and textile world, we had never sold anything in drums or totes. Everything was bulk. We had massive amounts of bulk storage available and ready. We had a lot of capacity that we could fill. We've been able to maintain that high service level of an industry that we came from into HPC and it's been well received. We had instances where customers needed something like viscosity change or a tighter spec, a pH change, and no one else would do that for them. It's like, “We can do that. It's no problem.” That's how we've survived so far.
It’s by being more customer-focused and being willing and able to make some adaptations to meet those customer requirements.
I had a lot of great mentors as I was coming through that owned businesses. They were incredibly successful in building those and they got bought out. To listen to their stories as to how they built their businesses has always been tremendous.
That’s helpful. It’s nice to have examples that you can follow, mentors and coaches along the way.
When I think about SCT, what's your geographic spread for your business? When I think about where your origins were with carpet and textiles, definitely the Southeast. Is it still Southeast or US-focused? Is it broader than that?
We're global. We sell to all of North America, Canada, Asia, Europe and the UK. We haven't ventured to Australia yet.
In any relationship, you compromise.
That sounds like a business trip opportunity to go see if there's business there.
I've been looking at a prospecting trip.
I did not realize that you were selling and operating globally.
We are. It's been a whirlwind with that.
Is your primary manufacturing still in the US or do you have manufacturing elsewhere?
We don't. Everything is still US-based. All of our manufacturing is in Dalton, Georgia. We have two locations here in Georgia. Our Research and Development is in Monmouth Junction, New Jersey, we have a lab up there. That was strategic and key for us. We have an absolute and tremendous leadership staff up there with Jim Griffin and others that through the pandemic I could not have asked for a better team. They were in the lab pumping out new things. They weren't distracted with the day-to-day. It was, “What can we make next?”
Having your lab up there is helpful in terms of proximity to a lot of the personal care customers and households as well.
It's been great because we do have a lot of our customers come to visit. They have a lot of great ideas and they can put their hands on what we're working on and what they would like to see.
When I look at the big trends in the chemical industry. If we put the COVID changes aside, although I think that's a long-term influence at least for the next period of time. A lot of the big trends that we see companies going through in the industry are focusing on are things like digitization and sustainability. Sustainability has been around for a long time. It seems to be taking an increasing focus. A lot of focus on the supply chain because of the challenges that we've seen over the past months. We look in the past and frankly, as we look in the future, there's still going to be a lot of supply chain challenges. When you think about some of those big trends and what's going on, what are you guys focusing on?
Sustainability has been at the forefront of our business and development. We come from an industry that has cradle-to-cradle certifications. They have no waste. Everything is recycled and reused. We began working with RSPO. We're certified through the RSPO. We also work with the Rainforest Alliance on their sustainable coconut oil and sustainable palm. They've been a great organization. We've been with them since 2009. They've been wonderful. It's not been an option for us. It's something that we've always done. With the supply chain, it's as much logistics as anything as availability. We had the storm in the Gulf that's wreaked havoc in the late winter and early Spring, but right now it's more freight-oriented. I don't think that's going to get better in the near term.
It’s an interesting one because the freight logistics have been difficult. What I hear from people is the availability of trucks or drivers, widespread challenges across logistics and shipping. How do you tackle that and how do you make it not a problem? Because at the end of the day, you still need to serve your customers. We all need to serve our customers. You can make excuses, “Logistics sucks. It sucks for everybody. What's different?”
We have a freight company and we've always run our own trucks. We've always run our way because everything that we came from was in time and everything was small bulk in this industry. We've always had our own trucks and it's carried over. A couple of years ago, we spun it off into Reeva Transport. Now we have twelve over-the-road tractors and a fleet of drivers. We are a for-hire carrier but we primarily focus on SCT. That's an advantage. I've had these conversations with tons of people. They're like, “The liability.” Yes, there is a ton of liability. There's no way around it and the insurance is astronomical.
It's crazy dealing with a fleet of drivers. It has its own challenges but they're amazing. They're super experienced and they're incredibly skilled. If you look at it, you spend millions and millions of dollars developing a product. It goes through R&D, your quality checks and your scale-up. When you finally make it, you get an order. You have no idea who's truck you're loading it on to or what that driver's going to do when he gets to your customer. Our drivers have a different relationship than our salespeople do. We've tackled it that way.
You’ve talked about the customer experience doesn't end when the order is placed. The whole fulfillment part of that order, the delivery, ensuring that your trucks show up with the right equipment at the right time, with the right behaviors are part of that customer experience, and it matters. Especially in an industry where the relationship is so critical where there's such longevity of business relationships etc. It's not just done from a sales and procurement point of view. It's done all the way through to final delivery. Sometimes the industry forgets about that because of the logistics and the supply piece of it, the delivery piece is considered not a core part of the business. It can be considered not critical and yet, it's the last bit of the relationship that your customer realizes.
Some could argue that’s the most critical because if that truck doesn't show up on time, you can run the risk of shutting someone down. It's not good. That's the cardinal sin. You don't do that.
I was chatting with somebody who said, “There is no such thing as just-in-time anymore because of such disruption in the industry,” that people have to be carrying bigger inventories or that your customers can't be as lean as they once were, etc. Are you guys seeing that as well?