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Kent Chemical

In: Business and Management

Submitted By cnelson824
Words 609
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Background
Kent Chemical Products and its international arm, Kent Chemical International, is a global leader in chemical additives and polymers used in consumer products, fire protection, and medical plastics. The company traces its roots to 1917 when it was established by the Fisher family. Originally founded as a rubber producer, decades of success allowed Kent Chemical to expand its business to plastic additives in the 1940’s and in 1953 began using technology-based research to drive product development. By 2007, revenues exceed $2.2 billion and the company had a presence in 13 countries with minority and majority stakes in over two dozen businesses. Kent Chemical sells its products in nearly 100 countries as well.

Problems with International Expansion of KCI
One issue Morales faced was that KCI only had minority stakes in the Joint Ventures. This gave KCI little control over finance and operations. Without a majority stake, it was difficult to have a decisive impact on the projects. Additionally, some JV’s called for combining companies that historically were competitors, such as FireGard and SicherFeuer. Because these companies competed with one another for decades, Morales’ regional directors had trouble coordinating activities and integrating operations.
Even after taking a majority stake in projects, Morales was still faced with additional challenges. One example was the consolidation of financial reports and operational reports. Morales staff would second guess country manager decisions, and the result was country managers who felt that they were being given subjective financial targets that were out of touch with reality. Capital allocation also became an issue. Where in the past the U.S. colleague would collaborate with the subsidiaries, when procedures changed to include regional managers and Morales himself in funding decisions, the subsidiaries…...

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