Hempel – Shaping a Brighter Future

Hempel is a renowned manufacturer of paints and coatings, with its sights set on growth. But it is also dedicated to making a positive impact.

Hempel is made up of 7,500 paint and coating professionals operating in the marine, decorative, energy and infrastructure industries. It has become a global brand serving 100 countries. But their goal is about more than just the company’s bottom line.

“We’re trying to do something good in this world,” says Lars Petersson, Group President & Chief Executive Officer. “We are owned by the Hempel Foundation, instituted in 1948 by our founder J.C. Hempel. The Hempel Foundation does good deeds with the money we earn, making investments in sustainability and biodiversity.”

“Doing something good in this world” is a goal with many facets. As Petersson explains, “It’s about how you earn your money, as well as how you spend it.”

On the one hand, it is reflected in the way Hempel does business with its clients.

“Trust is the number one word,” Petersson says. “We strive to have long-term relationships with our customers. Our ownership helps with that because we can take long-term bets, invest in things long-term and create win-win situations with customers. When things go wrong, as they often do in large infrastructure projects, we are positioned to do what’s right and retain that customer relationship, making sure we develop it in the future. I think the way our ownership reflects on our actions is what’s unique about Hempel.”

Petersson described Hempel as an “ultra-progressive” company, leading in its market segments while working sustainably.

“If you want a better coating solution than the one you have today, Hempel is your natural destination. We don’t have all the answers but we’re ahead of the curve,” Petersson says. “When it comes to suppliers, we can offer a route to market for the solutions they have. We can’t invest in it all here at Hempel, but we can connect suppliers to our customers. We are a good long-term, solid, and decent partner.”

Hempel’s focus on being a company that is a net benefit to the world around it is also a recruitment incentive.

“When we talk to our employees and potential recruits, we tell them they can make difference at Hempel,” Petersson points out. “We’re ambitious, we intend to double in size within five years. We’re an interesting option for those who want to develop their career.”

Double Impact

Right now, Hempel’s philosophy is being expressed in the form of a new strategy called “Double Impact”, borne out of the Covid pandemic.

“We were spending the first part of 2020 in lockdown like everyone else. We had a bit more time because we weren’t travelling around, so we did a strategy review and concluded we needed to grow,” Petersson recalls. “We are number 12 in the coating industry in terms of size, and size matters for economies of scale and capacity to serve international customers. It also has an impact on our ability to finance innovation. We felt we were a bit too small to be big. We’re not a niche company, so we need to grow.”

Double Impact is about doubling Hempel in size to a point where it can be more competitive, but it’s also about having a positive impact on the world.

“Our owner has ambitions to reach 100 million children in underdeveloped areas, as well as our ongoing investments in sustainable coatings and biodiversity,” Petersson says. “We put sustainability as a centrepiece of our strategy to make sure it’s part of every process. The strategy was formulated adhering to our principles. We defocused some areas in terms of geographies and customer segments. We create value in partnerships with customers, reducing costs, and becoming the natural go-to company for customers who want a better solution. We are a diverse, sustainable, modern company.”

Of course, change is not always easy.

Mike Tyson said, ‘Everybody has a plan until they get punched in the mouth,’” Petersson says wryly. “A lot of things got disrupted in 2020. Some of our suppliers started to take maintenance breaks, some simply shut down because of Covid, and when the demand came back it was strong and supply was not really there and there were cost increases. So, our greatest challenge has been to balance that in order to mitigate the effect of raw material costs and supply disruptions. We’re having dialogues with our customers and are trying to improve.”

Thinking “Outside the Can”

Double Impact is a multi-pronged approach. One such prong is the way Hempel is expanding its service offering. Typically, Hempel has devoted its efforts to “in the can” solutions, chemistry for coating and paint.

“Recently we have also started to work ‘outside the can’ with the services we provide,” Petersson explains. “Digitalisation is important for that. It creates value for the customer in the advice we give as well as the products we sell. It shows customers how they can use less paint, for example. We also believe it is important customers have access to the digital component of coatings, devices that help them use coatings in a more sustainable and profitable way. Across all segments, customers expect you to engage with them smoothly, giving them the data they need at a click. We in Hempel must follow that lead.”

It is no surprise to find that another prong of that strategy is sustainability, but it is still startling just how far that value penetrates to the core of Hempel’s thinking.

Sustainability is not a bolt-on. It’s not just a single department in the way it used to be,” Petersson insists. “Whatever decision process we have, whatever we develop, needs to have a sustainability angle to it. If it’s not sustainable we don’t invest in it, whether it’s a plant or a piece of equipment. We tried to put a sustainability angle into all our products and processes. The devil is in the detail. You have to work through a lot of processes to ensure this philosophy is ingrained in your way of working.”

Hempel has come a long way, but there is still so much more to do, as Petersson is first to point out.

I see us becoming even more customer-centric. We really understand our customers’ business. They need a solid advisor and partner in their endeavours. We’re becoming more specialised in the areas we serve,” he says.

Another essential ingredient of Hempel’s growth will be attracting a new generation of talent.

“We have become a company where it’s natural to come and work for us if you want to have an impact on the world,” Petersson says. “We’re a go-to company from an employee point of view because we’re dealing with the challenges of the world. We will grow, take market share, ensure we are relevant and secure our long-term future. My role is to take Hempel to the next level.”

More like this