Ask the Expert

David Mielke, President and CEO ChemDesign Products

David Mielke is President and CEO of ChemDesign Products in Marinette, WI. He has a Bachelor of Science degree in Chemistry from UW-Green Bay and a Master of Science degree from Silver Lake College in Management and Organizational Behavior. Mielke started his career at Aldrich Chemical as an R&D Chemist in Diborane and Silane Chemistries. He then left Aldrich and started at SpecialtyChem/ChemDesign in 1990 where he has held positions in R&D, plant management, commercial development, and since 2006 President and CEO.

How or Why did you become involved in the specialty chemical industry and how long have you been a part of that industry?

I have been in the Chemical industry for 28 years. In school I always had a passion for science and understanding how things work. Upon graduating, I thought I wanted to be an analytical chemist. A friend of mine who graduated four months prior to me went to Aldrich and was so enamored with the synthesis side of the chemistry that, and as he put it, “It’s so cool here; we do synthetic chemistry, handle pyrophoric compounds, and slam molecules together to make really neat compounds.” He talked me into synthesis. Aldrich was a great place to start and provided an opportunity to run all the reactions I had learned about in college with some of the best mentors in the world. This was fun stuff, discovery, mechanisms and learning how things work. After three years, I went to ChemDesign where R&D was more “D,” and the fun became taking known routes of chemistry and scaling them from the lab to 2,000 gallons…and doing it with limits on temperature, reagents and cost. The interaction with customers (some of the best R&D chemists and engineers in the world) and the operators in the plant led my journey into this great industry. I continuously saw new chemistries that our diverse customer base was developing and the impact they made on the world around us. I learned engineering and batch processing from the plant, and in exchange, taught chemistry to the operators. The specialty chemicals industry is such an integral part of our lives, and it’s refreshing to see the invention in all parts of industry focusing on feeding the world, reducing energy use, creating fresh water, and in general making compounds to improve quality of life. Plus, I never really needed to go beyond Marinette, WI.

What do you think are the most pressing challenges facing the specialty chemical industry and what solutions do you recommend for addressing them?

As an industry we have numerous challenges. However, the most pressing are: managing and maintaining compliance with tightening of environmental regulation (Process Safety Management (PSM), REACH, Toxic Substances Control Act (TSCA), Occupational Safety and Health Administration issues (OSHA), etc.), finding and developing qualified technical and non-technical labor resources, and capitalizing on our domestic capability to produce chemicals cheaper in the U.S. than anywhere else in the world due to abundant natural gas and our propensity to innovate.

How do we address these items?

Environmentally we need to be citizens of the existing laws and ensure we abide by them! Many spills and bad press have been the result of companies not following existing protocols. As an industry we need to hold ourselves to the highest standards. Be accountable, hold third-party audits of programs for compliance, and educate our staff and communities on the millions of things we do safely every day. Along with this, we need to represent ourselves well to government and state authorities (SOCMA, ChemStewards, Community Participation) to develop trust and transparency so they do not feel a need to increase regulation. Our business depends on flexibility, responsiveness and a commitment to health, the environment and safety (HES). Over-regulation can stifle this endeavor!

Labor Resources: Step 1 – Support STEM programs which include volunteering time and resources. Our high school and grade school kids need to discover at an early age how exciting the world of technology can be. Get them interested in science; help them find their role, whether as a chemist, engineer or technician – this is a thriving industry to be involved with. Making chemicals is pretty amazing stuff, and there is a lot of pride in all facets of this industry. If someone really wants to make a difference in discovery, in adding value to the world, in HES, then do it as a part of a great company versus sitting on the sidelines.

Capitalizing our Domestic Resources – this is the future. Based on resources, demographics and technical know-how, the U.S. is one of the best platforms for chemical manufacture. We have an almost unending supply of low-cost natural gas; we have innovative technical people who can communicate with customers 24/7; and we have the logistical infrastructure to dominate this industry. The burden we face is aging facilities and overregulation, which makes us slow to respond. WE need to work with government to encourage new manufacture, flexible permitting, and capital investment in domestic manufacture. As with environmental compliance, this comes from trust in our industry, education of those in positions of power, and breaking down the negative association with bad things happening. As we all know media likes to focus on the bad not the good. We can encourage the positive by taking time as leaders in the industry and talking about invention, innovation, the products people rely on, and how this industry has benefited every corner of the world. Trust is built on knowledge, hence the circle of education and our roles in the schools!

Do you think there should be common goals within the industry? If so what should they be?

Yes. All industries share common struggles, and the chemical industry probably has more than others. What are these goals? 1) A safe and environmentally compliant business that provides a service to its customers, takes care of the employees and families, and uses its net income to grow its services. As a result, increasing value to its investors. So what goals are a subset of this: Joining a trade group to stay abreast of proposed regulation and helping to mitigate before it becomes law (SOCMA). Working together to educate the average populous on the world around us and the role of this vital industry. Ensure trade agreements allow and protect the flow of goods and services to optimize our ability to conduct business. Much of this is directly related to the previous questions. We want to grow our businesses and expand our customer base and we want to be stewards of compliance. Our common goal is convincing local and federal regulators to allow that to happen, and us having an ownership structure that support doing it properly.

How do you define and measure innovation in Chemistry?

We are a toller, hence our innovation is problem solving, optimizing to improve yield/productivity, and reducing waste. This is measured in cost of reagents and waste in $/kg and reduction in cycle time per batch. As a whole, innovation in the chemical industry can be measured by new molecules coming out of R&D/year, or by a success ratio of invented molecules versus commercialized products with a distinct beneficial application. I have seen a lot of spurious invention, but it is the practicality of what was invented and how it can be used that measures innovation.

There is a fine line between novel new synthetic routes versus cost-effective industrial solutions. With limited resources and increased regulation, R&D leaders are facing a challenge of weeding through potential game-changers versus “neat ideas.”

Personal and Professional Strategies:

I have been lucky to have many influential mentors. They have included influential people in industries we’ve worked with, owners that challenge the status quo, and responsible investors that support our strategies. On a personal level, I have been a member of Vistage (TEC) – these are local groups of CEO’s and senior execs in different industries who meet monthly to challenge each other on employee development, culture and strategy. This is an extremely beneficial group and provides access to guest speakers for me and my staff. Employees enjoy continuous development, and if a speaker sparks a new idea, it’s well worth the minimal investment.

Bigger picture, we have implemented LEAN principles and Value Stream Mapping. My value to my customers is providing reliable assets, flexibility, accessibility and improvements to their processes. All aspects of our development focus on this endeavor. Assembling a team to support this has been my challenge and the next step is their development to be the best they can be and have a voice in guiding our growth.

In this marketplace, as a business diversify in product mix, diversify in end-use markets, and focus on what you do well will lead to success. Failure comes from chasing bad ideas and trying to be everything for everybody. Don’t let emotions get ahead of business sense.

What are the major changes you have seen in the industry since you’ve been a part of it?

In our industry we have seen a shift in product mix from the late 1980s in things like glyme ethers, photoresists, borderline commodities, to products that are more specialized and require higher levels of intellectual property preservation. Many of the electronics materials went to India, and the commodity agricultural products went to China. Old markets have died out, and new markets emerged. Our niche as a toller constantly changes, hence we cannot limit our flexibility and adaptability. Today, this industry is much more customer focused, needing a technical sales force working with technical purchasing teams. The value position has increased exponentially on a technical conversational level. Value potential needs to be identified in the bid and qualification stages. The face of the company needs skilled technical people who can look at a project and think two to three steps ahead on how we can help add value in the future.

Additionally, regulations are tighter, competition is smarter, and demographics are shrinking. Hence, we can never sit on our hands and wait. The world is getting more complicated, and managing it is a bigger factor than 20 years ago.

What advice do I have for a young person thinking about our industry?

This is a great industry with numerous possibilities…discovery, to scale up, to manufacture. Careers can be found on the drug side, the polymers, the additives, detergents, coatings etc. They key is to always be willing to learn, always look at getting involved outside of your immediate role (i.e. a chemist going from the lab to talk with ops in the plant versus putting the barrier at the lab door). Your initial dream job may change after five years (R&D chemist switching to management).

The industry indicators show the chemical industry will grow in the U.S. due to raw material costs. Capacity is being built in the south; specialty chemicals will follow this trend. Any degreed technical or professional in the sciences will be rewarded in the present and near-future economy. Major industries are focused on R&D, as these compounds are developed, domestic manufacturing will follow.

Enjoy what you do. When it quits being fun, do something different!

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