Outgoing Koppers chief optimistic about company's long-term future
December 11, 2014 12:00 AM
Koppers president and CEO Walt Turner will hand over the reins to Leroy Ball on Jan. 1.
By Joyce Gannon / Pittsburgh Post-Gazette
A week ago, Walt Turner, president and chief executive of Koppers Inc., toasted his upcoming retirement with colleagues, board members and friends during a reception at the Duquesne Club.
The next morning, he boarded a plane for Australia, where he planned to make the rounds at three Koppers facilities in that country and touch base with employees and retirees so that he could “thank them for a job well done,” he said.
Only a month earlier, Mr. Turner and his successor, Leroy Ball, spent a week in China, where they attended a ceremony for a new venture with Nippon Steel and visited two Koppers plants.
Call it a farewell tour of sorts for Mr. Turner, who turns 68 on Friday and who will hand over the reins to Mr. Ball on Jan. 1.
During an interview in his office last week, Mr. Turner said that after 16 years of running Koppers and making regular trips to its worldwide facilities, “Travel is not at the top” of his retirement plans.
He’s leaving Koppers after more than four decades with the Downtown-based company that makes chemicals and specialty wood-treatment products.
The Bedford County native in 1969 joined what was then called Koppers Co. for a job in the corporate controller’s office. Within a year, he was drafted into the Army for a two-year stint that included a nine-month tour in Vietnam.
He rejoined Koppers in 1971 and figured there was no more stable place than one of Pittsburgh’s historic Fortune 500 headquarters firms, which for years had supplied coke ovens to steelmakers and later evolved into a large building products business.
But things changed drastically for Koppers and for Mr. Turner in March 1988. He was working in marketing and sales and was returning from a trip to visit a customer in Charleston, S.C., when he read in the Wall Street Journal that British corporate raider Brian Beazer had made an unsolicited bid for Koppers.
He recalled thinking, “Does this mean there will be no more company? Or will there be a company with a job for me or a company without a job?”
After a tumultuous, hostile takeover battle, Beazer PLC acquired Koppers but decided to focus on its road construction materials business. It sold off the carbon chemicals and wood products divisions to a management group that included Mr. Turner.
Among the significant perks of the deal, he said, was the opportunity to keep the Koppers name and stay in the company’s iconic art deco building at Seventh Avenue and Grant Street.
“We were very highly leveraged but, fortunately, things went well,” he said.
A decade later, Mr. Turner became president and chief executive and in 2006, the company again went public through a stock offering.
Since its spinout from the original Koppers business that Beazer bought, Koppers Inc. has grown from $425 million in annual revenues to a projected $2 billion this year as a result of its August acquisition of Osmose Holdings.
Osmose makes specialty wood-preservation chemicals used in outdoor decks and fences and provides railroad industry services, such as bridge inspections and repairs for prominent rail operators, including Union Pacific and BNSF Railway.
Mr. Turner said Osmose brings to Koppers what he had sought for years: a third business “leg” in the form of its specialty chemicals unit. That will help balance the two segments already in place: Koppers’ railroad and utility products business, which makes railroad ties and utility poles, and its carbon chemicals, which are used by manufacturing industries.
With the Osmose deal, Koppers has 2,100 employees, including about 275 in the region at the Downtown headquarters and at plants in Clairton and Follansbee, W.Va.
He acknowledged that global economic conditions and downturns in the aluminum industry for which it supplies carbon chemicals have resulted in a series of tough quarters, prompting Koppers to close facilities, including a tar distillation plant in the Netherlands. The company is evaluating a plan to consolidate some chemicals production at an Illinois plant, which would result in downsizing in Follansbee.
The wood products side has been challenged by a shortage of untreated hardwood used for railroad crossties. Some of that wood, Mr. Turner said, is being scooped up by oil and gas drillers for mats placed across wetlands and creeks to support heavy vehicles.
He blamed recent big declines in the stock price — it has recently plummeted to 52-week lows — on the business challenges.
On Wednesday, shares closed at $24.40, down $2.07, making Koppers the biggest loser among stocks in the Pittsburgh-Bloomberg Index. Last Dec. 27, the stock traded at $47.24.
Some analysts have not been surprised by a series of weak quarterly earnings and the drop in share price.
In a report last month, Liam Burke of Wunderlich Securities said weaker aluminum production in both North America and Europe hurt the company but Koppers’ carbon and chemicals unit has shown improvement, “which would set this segment up for a rebound in 2015.”
“Koppers should also benefit from an increased presence in China and the Osmose acquisition,” said Mr. Burke, who has rated the stock a buy.
While admitting he’d prefer to leave the company was during “a banner year,” Mr. Turner is convinced the plant closures and restructuring efforts will benefit Koppers in the long term.
“I do believe we are doing the right things and, unfortunately, it takes time,” he said.
Mr. Turner, who will remain on Koppers’ board, said the company began transition planning a year ago. He lobbied to have the next chief executive come from inside the company.
Mr. Ball, 45, currently chief operating officer, was previously chief financial officer. Before joining Koppers, he was the chief financial officer at Calgon Carbon Corp.
“I think it’s a testament to Walt’s leadership that he was able to bring along an internal candidate to position to assume the reins,” said David Hillenbrand, chairman of Koppers’ board of directors. “I think Leroy will be a very dynamic and decisive leader for the company.”
Besides serving on the boards for Koppers and Junior Achievement of Western Pennsylvania, Mr. Turner plans to tend to his 150-acre farm in North Strabane. He has four horses and a few head of cattle and is looking forward to “spending my time on the tractor and all that good stuff.”
Joyce Gannon: firstname.lastname@example.org or 412-263-1580.
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