Quaker Chemical Corporation and Houghton International have combined to create Quaker Houghton, a global leader in industrial process fluids to the primary metals and metalworking markets.
A strategic combination is formed
The combined US$1.6 billion revenue company employs 4 000 associates serving 15 000 customers worldwide. Quaker was founded in 1918 and Houghton in 1865.
“We are rooted in companies commonly acknowledged as authorities in industrial fluids and valued experts in customer processes,” said Michael F. Barry, Chairman, Chief Executive Officer, and President of the new company. Barry, who previously served Quaker Chemical in similar capacities, went on to say, “Our similar cultures and values, combined with the talent and resources we bring to Quaker Houghton, create exciting opportunities to deliver innovative solutions that will help our customers’ operations run even more efficiently and effectively.”
The company’s combined breadth of product and service offerings can be found in end-markets such as aerospace, aluminum, automotive, machinery, can manufacturing, industrial parts manufacturing, mining, offshore, steel, and tube and pipe industries.
With its expanded products and services portfolio, the company expects that cross-selling opportunities will facilitate continued above-market growth. Specific products the company offers include metal cutting and forming fluids, corrosion protection fluids, specialty hydraulic fluids, and steel and aluminum rolling oils. In addition, Houghton customers will benefit from Quaker’s strength in specialty greases, high-pressure die-casting, mining specialties, surface treatment and bio-based lubricants, while Quaker customers will now have access to Houghton’s heat treatment quench products, offshore hydraulic fluids, metal finishing products, and a broader metal removal fluids portfolio.
“Our foundation will be the same customer-intimate operating model that has been key to the success of our customers. Moving forward together, we will draw upon our rich history and shared expertise to enhance our product and service offerings and continue to deliver value-added service expertise to our customers,” said Barry.
The company expects to achieve significant cost reductions as a result of the combination and has increased its estimate of cost synergies to US$60 million from US$45 million. The cost synergies are broad based and are expected to come from three major areas of asset optimisation, logistics and procurement and operational efficiencies. The cost synergies are expected to be fully realised on a run-rate basis by the end of year two with US$20 million being achieved in year one, US$45 million in year two and the full US$60 million in year three, reflecting 100% achievement as the company exits year two.
No announcements have been made as to who will represent the new company in South Africa.