Leo Alders, CEO of LAT Nitrogen, is a matador of chemical industry who has spent there more then there decades, mostly with Borealis, now LAT Nitrogen that became part of Agrofert Group early July. Former army officer and kayak racer on the flat water shared with has his ambitions in new dress. “Being open, being honest and showing good results” that is his the way to build trust. Due diligence are currently underway at the LAT Nitrogen factories. Their results should bring examples of synergies from which both new coming and current plants in the Agrofert family should benefit.
Agrofert is known for that people are with the company for more than 10 years in average. You have more than doubled this number being with Borealis, now LAT Nitrogen, since 1989. Is it obvious in LAT to be there for so long?
I have been one of the people that have the longest service time in the company. Being in chemical industry for such a long time helps me doing the job that I am currently doing. Not all my colleague are there for such a long time but in my case, I was fortunate to have growth opportunities within one firm.
How did you actually get to Borealis?
I used to work for Bayer from 1987 until 1989 in Antwerp. I got married and as my wife was from the north east of Belgium. I moved to that region and was looking for a new job there. Borealis had a plant in neighbourhood and my chemical experience and background from Bayer were appreciated, so I started to work in Bedrijfsleider plant as a process engineer. That was the beginning of my career in Borealis.
In addition, you journey to the leading position in fertilizer division started…
Some six years ago, they asked me whether I would be interested to work in fertilizer business of Borealis, I did, and that is how I ended up in my current position. But, I went through many functions in the company. I spent a long time in polyethylene and hydrocarbon business of Borealis. That was also useful for what I am doing now because I built a lot of experience and it really helped me. And, a lot of things like work processes are similar.
Now, you know LAT like no one else. How would you introduce it to people of Agrofert?
The Fertilizer history of Borealis has started in Linz, our largest location by far. Linz was the first step of Borealis into fertilizer world. After that, the Ottmarsheim site was purchased. It was the first plant outside Austria and our first experience in France. That became quickly a success. The plant was within a year very profitable. Afterwards Grandpuits and Grand-Quevilly, our second largest site, were purchased. It was an organic growth over the years; one plant after the other came to the group. What is typical for LAT today is that we are a company of different sites but we manage several processes on a group level. For example, we have a single sales concept, meaning that there is a central function that decides which product from which plant goes to which customer for which price. That is centrally organised and it is different in comparison to how Agrofert is organised today. It is a choice of the model but that characterises LAT Nitrogen.
How does your product portfolio look like?
We have three product groups: fertilizers, melamine and what we call ten products: they consist of ammonia and ammonia water as main products.
Looking at your product range, melamine is the only product that is new to the Agrofert family, right?
Exactly. Partially we produce melamine in Linz but also in Piesteritz in Germany (close to SKW). You can say that in fertilizers, LAT is big in Europe and most of our production is sold within Europe, but melamine is our worldwide product. We are second largest producer of melamine in the world.
Maybe not everyone knows what actually melamine is…
Well, the easiest application is in the kitchen on tables or other elements where you need the surface to be scratch-resistant and temperature-resistant. That is why the melamine goes usually to the wood industry, to the furniture industry and to the construction business. Because of that, it is also a cyclical product. If the economy is running well, melamine is very good selling product. But, if you have and economic downturn like today and many people postpone the next kitchen purchase you also see that the melamine business is going not so good. Fertilizes are also cyclical business but less in comparison with melamine business.
How would you describe the culture of LAT?
I should start with the history of Borealis. The company was created as a merger of two companies: Finnish state oil and gas company Neste and the Norwegian oil and gas company Statoil. It has very much Norwegian background and, typically, you could say that the Scandinavian culture is a very open culture; there is not so much of hierarchy structure in the company. People are used to walk into the office of the CEO and talk about their matters. That is OK for me. We have an open door policy. I think the Scandinavian culture background still resonates in the organization with open and good communication and there is a lot of attention to people development.
That sounds as positive aspects. Do you think that you will be able to keep them under new owner?
During the divestment process, we met various people from various companies and culture and I must say that from the first time I felt the best match with the people of Agrofert. I felt that the Agrofert culture is very close to ours. Many employees of our company see our culture as a benefit. When our people heard that it was finally Agrofert who bought us, there was a lot of relief in the company.
Talking about the culture, LAT has strong presence in Austria and France. How do you manage these two very different cultures?
It is true that we have several subcultures in LAT. There are not only Austria and France, but also Germany (Piesteritz). Each of them has its specifics. For example, if you want to tackle problem in Austria or in Germany, people start taking first steps without knowing fully what outcome or total timeline will look like. You start with big ambition and somewhere on halfway you can ask the question: what was the goal, or how the track looks like? In France, they want to know how the plan looks like in total and need much more time to discuss what and how should we do, when and who will do it, etc. And once the plan is done, everything goes very fast. They typically take a bit more time in the beginning, before start whereas the Austrian mentality is more that we start and we will see. That is the biggest different from my perspective but we can manage it.
Do you have a tip on how to make all cultures work together?
What we really have in common as LAT is the continuous improvement culture. We have always promoted to use a common set of tools where you first analyse what your problem is, make proposal, then implement it, and then review. I think that the cross-learning between sites works also well. We have quite frequent contact among different locations where we try to copy something that has been solved in one location to another location. The cooperation is running quite smooth and people appreciate it in Linz as well is in the French locations. Now, what I think is added by Agrofert is that we are becoming a part of bigger group. Agrofert has a lot of experts that are ready to help us with the due diligence exercise per plant. Everybody hopes that this will lead to another level of cross-learning across wider set of sites which will enables us to improve even faster. In Borealis, we were part of the company that was doing hydrocarbons, polymers and fertilizers. We were not core business in that environment. Now, I see the first outputs of due diligence exercise that are happening now at French sites and the reports are really quality outputs.
What do you appreciate in Agrofert culture?
Openness and willingness to listen. I had a lot of contacts with Petr Cing, Libor Nemecek, Pavel Hanus and their teams in Duslo, SKW and Lovochemie. My experience always was that if you give your opinion and have good arguments, they listen you and it is easy to get to the conclusion that goes quite fast. For example, today, we had board meeting. We had lot of subjects on the table took a lot of time to conclude upon which in the past. Today, on the meeting they were quickly and smoothly solved. Open discussions, quality discussions and quick conclusions that is my first feeling of Agrofert.
What would you like to bring from LAT culture to Agrofert?
It is not different from Agrofert; it is continuous improvement of potential that we have. I also have seen that in Agrofert, the companies are equal; the open communication is part of the process. Underlying values of these two companies are very close together. We maybe use different words but in the end, it is all about having respect to each other, having open communication, to be engaged, and to find easy solutions.
What are your targets for the nearest time horizon?
We are now part for the bigger group for which the fertilizer are the core business. There is a lot of opportunity to learn from each other. We are now going through due diligence and the teams involved are doing excellent work. In the course of September, there will be a number of recommendation issued by these teams. It is an excellent opportunity to build further on, and we will adjust our business plans based on these due diligence activities. That is just one integration project. Today on the board meeting, we discussed 20 integration project among Duslo, Lovochemie, SKW and LAT.
What are the projects about?
These projects will deliver benefits for both sides. They will be the basis of improvement for us in course of this year. We have foreseen financial results that were lower than last year. Last year we had an excellent year. But, in order to guarantee the future, we need to gain profitability. I hope that by executing this integration projects, we will be able to improve profitability. And, then we will really be the second largest fertilizers company in Europe. That opens us the different perspectives. We have the integration projects to realize the synergies. We. I am sure we have not only short-term improvement potential, but also medium- and long-term potential. We will now take time to discuss in board. The picture is not yet fully clear but by the end of the year, we would like to have plan for LAT, which will fully employ these opportunities for improvement.
Can you give some examples of already visible outcomes?
One clear example of the project is the way, how we do turnarounds. In LAT, we typically do turnaround in our plants every six seven years with the consequence that if you have such a long period between the stops, you need to do a lot of maintenance and inspection works in a very short period and often, we have trouble to finalise such a turnaround exactly in a time foreseen. Whereas Agrofert has a turnaround approach that, there is a stop every two or three years. The scope is smaller and the period shorter. Now, we are comparing what is the best alternative. It is a good example where we can do a cross-learning because both approaches have some positives and negatives and we want to find the best solution and apply it. The idea for the future is to have a common turnaround approach. This is one of these 20 projects.
The part of Agrofert culture is to give its companies maximum freedom and responsibility at the same time, as we believe that you know the best how to do your business. How does it match current set up of LAT Nitrogen?
I think this is a good point. Giving an ownership to the organization is crucial for its results and LAT management sees that as a real opportunity. Giving people ownership of their own results means also to reward them for their own results, that is very motivating. On the other hand, we in LAT are also used to do many things together, which promotes collaboration across the sites. I think that it is also worth to look into it as potential cross-learning because as both approaches have some benefits. The local engagement is really important but also synergies across the sites bring their benefits. There is one project where we are looking to how to combine both approaches.
Do you have any personal message for Agrofert people?
Before I started working in chemical industry, I did military officer school and learned there what teamwork really means. A lot of people maybe think that in the army it is just about commanding all the people but I saw a lot of teamwork in the army and I took it off with me for the rest of my career. I really believe in giving people autonomy or ownership, how you want to call it. I really believe in that concept and feel in it at home in Agrofert. I hear that a lot of employees of LAT Nitrogen are happy to be part of Agrofert family. I feel good with the culture that Agrofert has and our people say that we have found good home at Agrofert. We need to show with our results that we deserve our place in Agrofert. It is nice to say that you are in the culture that you like but you also must show that you are part of it, that you are engaged to do so. From my military officer background, my career but also my sport background, I like to be part of the team and to bring the results. That is the challenge for us. Every time when I start to work on new project, the first think is to build trust between each other. The first six months are most important. How to build the trust? By being open, being honest and showing good results.
Have you noticed any reaction on that the Czech company acquired the Austrian company? There is some kind historic rivalry…
I am Belgian from the background so for me, Czech, Austria, Germany are all equal; all are in the Central Europe. I have not heard any specific positive or negative talks about any country. I come from family of farmers. My grandfather was farmer, my father was farmer and my nephews are still farmers. When I told them that I started work for Agrofert that is actually a fertilizer production company, then they told me aha so you can make us a good price for your fertilizers. I said, guys, this is of the table. However, that was just a joke.
As you are new to the Agrofert family, is there anything that would help your people to integrate?
Meeting each other. Even before signing the deal, we have several visits in Duslo, Lovochemie, SKW, where our people could see how Agrofert site is being run and we saw that there are very clean plants, good safety level, good maintenance level, and that gave us trust. So that the first wave, quite many people of us visited different Agrofert locations and now, the due diligence teams are coming back and the match between teams is really there. Now, the due diligence team visited Gradpuits, Linz and Ottmarsheim, and the feedback was everywhere the same, professional people, knowing their business, from both sides, I mean, our team saying good teams, good skills.. And, now, when I read the due diligence reports, they say exactly the same, very skilled people, knowledgeable about the business. That is good basis for the trust.