Steve Holland, Brenntag's CEO, is unconcerned about the UK's departure from the EU © Charlie Bibby/FT
Steve Holland recalls his first day as chief executive of German chemicals distributor Brenntag six years ago. From his office on the 14th floor of a 1960s block in Mülheim an der Ruhr, near Essen in Germany’s west, he asked where he could find the sales manager for Germany. Discovering the manager was on the seventh floor, Mr Holland decided to pay him a visit.
His secretary protested, telling him, no one from the board had ever been to the seventh floor. “Well, things are going to change around here,” came Mr Holland’s reply.
The chief executive is a rare specimen — a foreigner running a German multinational. Under his stewardship the organisation’s hierarchy has flattened, he says. “When I went over to the head office, there were a lot of corridors with closed doors.”
The previous regime did not encourage subordinates to try out new ideas. “My influence has been to break down those barriers and to create a culture, which is down those lines of the meritocracy,” he says.
It has been good to see employees thrive “in terms of their contribution and their confidence, to express what they want, what they feel and what ideas they have”.
Mr Holland, who is trim, with glasses and greying hair, looks younger than his 60 years. He talks quickly and easily, sprinkling the conversation with an entrepreneur’s stock words: “fun”, “passion” and “exciting”.
With more than 10,000 products, Brenntag supplies around 185,000 customers in a range of industries. They include Airbus, the aircraft maker and Syngenta, the agricultural chemical company. It provides everything from powdered egg to bakeries, to drilling fluids for oil rigs. It had 15,000 employees and revenues of €10.5bn in 2016.
The company, which floated in 2010, has a presence in 74 countries and is the global market leader in chemical distribution, with 7 per cent of the market. It is on an expansion drive, having bought 77 companies in the past decade, with an average of five undergoing due diligence at any one time.
Cultural differences between a German and a British or American business are fewer than many believe, according to Mr Holland. There is a worker’s representative on the board, rare in a UK or US business, but they sit on the supervisory board, which also features non-executives.Supervisory board members generally deal with the politics and let him get on with running the business with a management board of five executives, he says.
“Brenntag is not really a German company. It’s headquartered in Germany . . . We’re, effectively, an Anglo-American company where 60 per cent of our shareholders are British or American investors.”
When he joined, the head office was not multinational. “It was just German. And now we have Dutch, French, Americans, Brits, Spanish; we have the lot. It’s part of the growing-up of the organisation.”
His team, he says, has a “very hands-on management style, which you don’t often see in German companies”. He remains frustrated by European labour laws that make it hard to lay off unneeded or underperforming staff.
In only one way is the company conservative, Mr Holland insists — in its tax planning, where he says it pays its dues without setting up fancy foreign structures.
The directors knew what they were getting when they hired the straight-talking Briton. Mr Holland, who was born and brought up in the industrial town of Bradford in northern England, used to be an entrepreneur.
After studying chemistry at nearby Leeds University and working for Hays, a distributor, he bought his employer and a rival, Albion Chemical Partners, in 2001. The combined group, Albion, became the UK market leader, branching into areas such as food, cosmetics and pharmaceutical applications.
But he kept finding the path to new markets blocked by the incumbent, Brenntag. So he sold up to the Germans in 2006 and Brenntag invited him to run the UK operation. After threatening to quit, a year later, Brenntag asked him to run the entire European operation and gave him a seat on the board. In 2011 he got the global chief executive job.
Running Albion was an advantage. “It wasn’t a case of someone coming from a corporate environment and landing on top of an organisation. I was actually going to be running the organisation with a lot of ground-up knowledge.”
Mr Holland describes Brenntag as a “chemicals supermarket”. It is a middleman that allows manufacturers to get products to places they could not do alone. In the case of isolated oil drilling sites this means delivering not to an address but a “grid reference”.
Brenntag is shielded from competition due to the fact that regulatory requirements surrounding the storing, mixing and delivering of chemicals create barriers to entry.
Sales have increased from €8.7bn in 2011 to €10.5bn in 2016. Ebitda rose from €661m to €810m, lifting the share price from around €27 to more than €40 over the same period. However, much of its growth has come through acquisitions.
Sales growth has returned in the US and Latin America. Brenntag had suffered as a crisis gripped oil-rich Venezuela and a fall in commodity prices hit other economies.
Mr Holland is unconcerned about his homeland leaving the EU — as long as Brussels does not “force a bad deal” on it. He adds that headlines about Britain’s poor productivity have puzzled him. Within Brenntag, the UK, which constitutes about 15 per cent of its European business, is the most efficient division. Nevertheless, his main focus is outside Europe, which accounts for 55 per cent of the business.
“I see green lights in North America; I see green lights in Europe, which continues to grow; in Asia-Pacific, bright green lights. It’s an exciting time for us.”
Secon opinion: the fellow executive
William Fidler, an American who served on the management board with Mr Holland until his retirement in 2015, said he drove his subordinates hard but led from the front. “He is a true entrepreneur” who will always keep Brenntag from being “mindlessly global or hopelessly local”.
Mr Holland leads with “energy, passion and enthusiasm and as with all great leaders, communicates clearly and consistently. You never have to guess at where Steve stands on an issue.”
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