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Mark Vergnano on Chemours (Audio) · Bloomberg Intelligence

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  Speaker 1: You're listening to Taking Stock on Bluebird Radio. In July
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  Speaker 1: of twenty fifteen that Kemore's a Company or KEM Wres
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  Speaker 1: was spun off from DuPont and here to tell us
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  Speaker 1: more about the company and its business is Mark Vergnano.
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  Speaker 1: He is the chief executive of KEM Wars. Thanks very
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  Speaker 1: much for coming into the studio. Great to be here.
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  Speaker 1: Let's talk, or rather you talk and you describe the
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  Speaker 1: three main business lines at KEM war so people understand
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  Speaker 1: what it is the company is focused on. Well, as
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  Speaker 1: you said, you know, we spun out last July from
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  Speaker 1: DuPont and what we like to tell people is where
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  Speaker 1: we're a startup, but we sort of had a two
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  Speaker 1: hundred year head started from that standpoint. So you know,
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  Speaker 1: three product lines that came outside of UH came out
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  Speaker 1: of DuPont. One was our TiO two business, titanium dioxide
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  Speaker 1: used in paints, plastics, even used in your toothpaste in
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  Speaker 1: the morning, anything to make white. Um are floor products business,
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  Speaker 1: which is both the polymer side Teflon as a brand
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  Speaker 1: that many people know, as well as our refrigerants free
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  Speaker 1: On what might be a refrigerant many people remember, but
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  Speaker 1: our brand new refrigerant optition which has low global warming
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  Speaker 1: potential UM. And we have a chemical solutions business, which
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  Speaker 1: UH really is about mining chemicals primarily. Is the is
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  Speaker 1: the third leg of our business. I just want to
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  Speaker 1: touch on the fact. First of all, your background. You're
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  Speaker 1: a real chemist, aren't you? Chemical engineer? Well? There you go,
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  Speaker 1: But so what was what was your kind of path
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  Speaker 1: from being a chemical engineer to now running this very
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  Speaker 1: exciting CEO slash startup. Yeah, so I I came out
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  Speaker 1: of the University of Connecticut and not that far away
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  Speaker 1: UH and came into DuPont thirty five years ago and
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  Speaker 1: UH started right away there, ended up getting my MBA
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  Speaker 1: while I was there, but progressively just took different roles
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  Speaker 1: in different jobs. Started in the lab, started doing a
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  Speaker 1: process development, and then eventually running business. Does it help
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  Speaker 1: to be someone with a real chemical background to run
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  Speaker 1: a company like this, I think well. I always would
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  Speaker 1: always tell people it's great to have an engineering background
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  Speaker 1: just from a logic flow, you know, you you sort
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  Speaker 1: of think of things logically. I think it helps. But
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  Speaker 1: a company like DuPont and now a company like Comor's
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  Speaker 1: chemistry is really what we are right, We are a
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  Speaker 1: chemistry company. So from that standard's absolutely very helpful in
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  Speaker 1: terms of the background for the company. Now, I gotta
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  Speaker 1: ask you this question, because you were, as you just describe,
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  Speaker 1: spun out of DuPont and there are legacy legal issues
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  Speaker 1: that exist. Can you shed any light on responsibility where
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  Speaker 1: they stand and you know what you believe is going
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  Speaker 1: to happen. Yeah, what I would say is when we
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  Speaker 1: were spun out of DuPont, we we were spun out
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  Speaker 1: with a variety of things, three fantastic businesses that we
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  Speaker 1: talked about. UM. We were given a large amount of debt,
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  Speaker 1: about four billion dollars a debt, and we had some
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  Speaker 1: legacy liabilities that came over with us UM. I think
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  Speaker 1: people were a little bit nervous about that, about the
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  Speaker 1: debt and the and the legacy liabilities in the beginning,
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  Speaker 1: and as you might have seen, our stock was sort
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  Speaker 1: of bouncy in the beginning. But that's a nice that's
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  Speaker 1: a nice way to do. I mean, just just to
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  Speaker 1: mention in detail, right, this has to do with the
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  Speaker 1: Washington Works plant I believe in uh Parkersburg, West Virginia, right,
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  Speaker 1: And I had to do with the chemical used to
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  Speaker 1: make teflon in manufact that's right, and so that that
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  Speaker 1: liability still exists now it does live with DuPont, but uh,
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  Speaker 1: you know it is connected back uh to us through
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  Speaker 1: an indemnity. But I think what the reason the stock
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  Speaker 1: was so volatile in the beginning is people weren't sure
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  Speaker 1: what would this company be able to handle whatever came
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  Speaker 1: back from the liabilities as well as the dead And
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  Speaker 1: I think what we've shown is, you know we are
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  Speaker 1: We put together right away a five point transformation plan.
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  Speaker 1: You know, that plan was about taking costs down, focusing
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  Speaker 1: our businesses on the three that we talked about, really
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  Speaker 1: channeling our investments, UM, divesting in businesses that weren't our core,
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  Speaker 1: which we've delivered about seven million of cash from that standpoint,
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  Speaker 1: and really working on a enhancing our organization. As we've
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  Speaker 1: been successful in taking the cost out and successful and
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  Speaker 1: and uh shedding those businesses and taking the cash that
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  Speaker 1: can be aimed down to bring our debt down. I
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  Speaker 1: think people have gained lots more confidence in this company.
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  Speaker 1: So I think a lot of those issues now are
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  Speaker 1: getting lesser and lesser in the minds of our investors,
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  Speaker 1: and that's why we're up stock price. So what drives
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  Speaker 1: demand for your products. And of course one of the
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  Speaker 1: big ones you say that the the titanium dioxide which
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  Speaker 1: is in so many things including two paste. Uh. Is
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  Speaker 1: it global growth? Is it certain kinds of new business
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  Speaker 1: is being formed? Is it what happens in China? What? What?
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  Speaker 1: What is going to determine what kind of year you have?
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  Speaker 1: Say so, t I O two traditionally is a GDP
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  Speaker 1: growth business, So it's going to grow at GDP around
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  Speaker 1: the world. So whether you think of that at two
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  Speaker 1: and a half or three percent today, that's the kind
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  Speaker 1: of growth rate. It's almost a perfect correlation. But the
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  Speaker 1: way you exceed that kind of growth is by bringing
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  Speaker 1: in new products. So, for instance, we have a brand
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  Speaker 1: new T O two product that we call Type here
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  Speaker 1: one coat. It allows paint manufacturers to manufacture a paint
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  Speaker 1: that you and I can apply in one coat. So
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  Speaker 1: it's enhances because it has the hide ability, it has
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  Speaker 1: the opacity that you need if you're going to paint
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  Speaker 1: in just one brushstroke. Now you and I both know,
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  Speaker 1: we both I'm sure painted rooms before, and it's torture
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  Speaker 1: when you have to do it with multiple codes. So
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  Speaker 1: if you can do it in one it's really a
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  Speaker 1: lot of ease. So those types of things, whether it's
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  Speaker 1: in our TIL two business or floor products business with
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  Speaker 1: our refrigerat optition new products are really what we're going
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  Speaker 1: to drive our growth rate beyond what GDP would be.
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  Speaker 1: So just quick fun question, how much you're spending on
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  Speaker 1: R and D. R and D for us is about
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  Speaker 1: two to three percent of our revenue. Um it's it's
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  Speaker 1: you know, aimed a little bit differently around those three bills,
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  Speaker 1: but it's about two to three. Okay, Well, he's he's committed.
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  Speaker 1: He's been up a percent since this company was born
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  Speaker 1: a year ago. I'm talking about Kemore's CEO, Mark Vignal.
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  Speaker 1: Thank you so much for joining us on. Kathleen Hayes
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  Speaker 1: along with Pim Fox and this is Bloomberg