The COVID-19 pandemic caused a global shutdown on an unprecedented scale. While a huge number of companies could not jump back after this worldwide crisis, some still managed to survive. Vink Chemicals is one of those that faced a COVID-hit market and proved bigger than its long list of adversities. Victoria Meyer talks with the brilliant minds behind this company, Branko Ulaga and Diana Lima. They share how they pulled this off despite their industry’s highly regulated environment and unpredictable nature. Branko and Diana also share secrets on building an effective virtual team, designing reliable customer service, and securing business partnerships in different regions and cultures globally.
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How Vink Chemicals Navigated Through A Global Shutdown With Branko Ulaga And Diana Lima
I am speaking with Branko Ulaga and Diana Lima from Vink Chemicals. Branko is the Chief Legal Officer for Vink, where he leads regulatory compliance and legal as well as global and HR strategy and provides advice in those areas. Diana is the Business Unit Director for North America where she is focusing on growing the business in the North American region. We’re going to have a great conversation about Vink and about how its approach to the market is unique and the products it brings to the market.
It’s great to have you here. Branko, let’s start with you. What’s your origin story? You’re obviously a lawyer, you’re well educated, and have worked a lot across Europe. How did you get interested maybe in legal, but also in chemicals? What brought you to Vink Chemicals?
The answer for legal is a general sense as a young person of justice and all the history of creating democracies, equality, and justice throughout the world. After finishing both bar exams in Germany, I started with a couple of internships that started with a German-Canadian law firm and more of international background and transitioned to Caterpillar, which is the construction industry.
They have the excavators and the trucks and so on. It’s an interesting field also, full of regulatory, maybe also dual use issues which are also prevalent in chemicals. During that time, I did an MBA in London at the Hult Business School which is an American business school. There I met Mr. Jamie Vink, who is the CEO and owner of the company. We got to know each other during those two years. It happened. I transitioned into the chemical industry.
Diana, how about you? What got you interested in chemicals and Vink?
My background is I’m an engineer, but not a chemical engineer. The chemicals found me more or less. For me, in the beginning, it was more about the people, the company, and the job. Somehow, I started in the chemical industry and stayed in the chemical world. I started in the industry and then I moved to another company where they specialize in biosciences. Now, we’re also talking about biosciences and what we do. First, I was responsible for product management, oil and gas, and then I was lucky enough because the company sold the industrial part to Vink Chemicals.
I was part of this merger & acquisition project, which was amazing. After this project was closed and Vink acquired the whole industrial part, I joined Vink Chemicals first as a Chief Marketing Officer leading the oil and gas unit worldwide. After that, now with the task of developing the Northern American region, which is quite new for us. Originally, I’m from Mexico, but I’ve spent the last several years in Germany. That was also a good mix that led me to this position and what I am now.
In the chemical industry, once you’re in, it is hard to leave. I’m glad that you’ve stayed and are continuing to enjoy it. Tell us a little bit about Vink. It’s maybe not familiar to a lot of people, so tell us about the company.
Maybe I can start with that: there has been traditionally a German trading house or trading company in Northern Germany, Lower Saxony. They were trading different items throughout the world. It happened that there have been more requests and demand for these specialty chemicals, let’s call them that. Finally, Jamie Vink found this company to specialize and focus on chemicals, especially because there have been a lot of regulatory advancements within Europe. You have to specialize and focus on that field, as you can imagine, and similar in the US. Around 2011 and 2012, they found Vink Chemicals. It grew organically until 2019 with around 25 people, which is when I joined, in August 2019.
We made a merger and acquisition in the same year, two of them. One production plant and one asset deal with people, knowledge, IP, recipes, and so on. It quadrupled within a short time to around 100 people. Now we’re nearing 150. We have two production facilities in Germany. A couple of them also have partnerships around the world. We’re building a third one in Northeastern Germany. We’re a manufacturer formulator blender, and also a bit of R&D for biocide substances and products. Additives, in particular, the oil field chemical production, and then some other specialty chemicals, depending on the customer and whatever they need.
That’s interesting. Biocides, too. It’s always an interesting thing to me when I look at something like that because it’s not an area I’ve personally worked in, but it touches a wide variety of market areas. Let’s dive into this. The pandemic obviously put a big spotlight on hygiene, biocides, and the importance of that. How has that impacted your business?
I would say two main points that I saw and there are many more. First of all, it was the need for online communication to be stronger. We were at the beginning of the post-merge because we closed and merged at the end of 2019 when COVID strikes. After that, we were not able to face each other and we were joining four different work cultures. We needed to establish online communication platforms and channels fast. That’s one of the main tasks.
This was also important for the customers because it was a change. For the salespeople, how they face it, how they sell the company themselves, and how they gain their trust. To get the follow-up communicated, any adjustment on supply and demand, which was a lot happening, we adapt pretty fast to this change which allows us to keep on growing. That was one of the main points. The other one was to have a strong supply network and utilize this strong supply network that the Vink Chemical Group has. That allows us, despite the situation, to be able to get the materials and keep providing the solution to our customers. These two were challenging.
I hadn’t put the two together until you mentioned that, the fact that you guys quadrupled your business at the end of 2019 by acquiring businesses. Immediately thereafter, the pandemic started, global shutdowns, and challenges in terms of trying to 1) Form and integrate those businesses, and then 2) Be able to respond to the market under intense pressures because all of a sudden, everybody wanted your products.
That’s true. If I may add a couple of things, a famous Article 89 of the BPR, which in essence meant the interrogation from a couple of requirements. In Europe, you have green-listed suppliers and then no other suppliers are allowed to supply active substances, so you have to buy from them. That was abolished for ethanol, isopropanol, or some other substances during the pandemic. I’m not saying everybody, but in essence, everybody could produce and buy from wherever they wanted in the world. There was a real flood of disinfectants. Similar things happened also in the USA. I read an article where a Texan company was fined around $250,000 for violating FIFRA, which is the biocide act for the US.
They still sold some of the old disinfectants, which were not allowed to be sold anymore, or something similar like that. I don’t know the details, but this is a similar situation in the market. We had to pivot the business model. We were into incorporating all the products that we’ve had and bought through the acquisitions and then suddenly you have to change, produce, and buy a lot of disinfectants and sell a lot of liters to a lot of customers. That was interesting. It’s a typical VUCA, Volatile Uncertain Complex and Ambiguous world situation.
What’s interesting, too, is a lot of the markets that you sell into are highly regulated. What challenges do you face in entering those markets? You’re entering new markets with pretty high entry barriers when you think about regulations in the regulated chemistry market. What are the challenges, and how do you guys tackle that?
I’ll take this first as well, and then maybe Diana can follow up from her perspective. It’s been an interesting and complex journey for me so far in the last couple of years. I still am humbled on a daily basis. I’m happy that I have a great team who are the experts: toxicologists, microbiologists, and chemists because no one person can know everything. In chemistry, you learn that pretty much. It’s such a broad field. It’s everywhere. Even if firearms are regulated by a different regulation in the US, it’s chemistry as well, and works there. In Food also, there’s chemistry. It’s such a broad field that bridges human beings with the limited CPU up there.
It’s been an interesting journey. I have to stay curious and learn every day. It’s interesting because TSCA and REACH are the main regulations when I compare them to the EU and US. They have a different mindset and penetrating the new market requires a lot of preparatory and regulatory work. Maybe Diana and her colleagues will do more market research and customers, and she can get into that in a second. From a regulatory perspective, you also have to do a lot of regulatory market research. Let’s say small differences like the EPA enforces TSCA, which is enforced by the member States and the EU. You have this TSCA list with 85,000 chemicals. Many of them are inactive and some of them are active.Chemistry is such a broad field. It's really everywhere. Click To Tweet
In REACH, you have registrations per producer or per substance, so we have to supply in advance without the EPA. The ECA, which is the European Chemicals Agency, without them asking us explicitly through a ruling, some test order, or whatever exists in TSCA, you have to provide a big document in advance, which can be several hundred if not 1,000 pages. There are all these differences where you have to, in the beginning, rely on a good network, good knowledge of consultants, and then also get your own in-house expertise up, a lot of training, internal communication, and knowledge management. That’s from our legal part.
The piece as well is that I’ve heard from talking with others. I’m thinking about the timeframe that you guys have been working in and trying to focus on this growth over the past few years. It’s been hard to move new products through the regulatory system in the US certainly. Europe as well, but in the US, a lot of people have felt stagnated in their ability to move new products. You mentioned certain regulations lessened, or got lifted temporarily because of the pandemic for the pandemic response, but many things did not. It’s a complex set of rules and regulations and individuals in groups to be working through.
On the side of the market perspective, entering a new market is challenging. There are many regulations and it’s an investment. You would need to be aware of what you want to focus on because it’s not the same. In Germany, it’s our base home. We have way much more. When we think about North America, we focus on what would be our main products and solutions. How do we want to differentiate? Also, the customers don’t know us as they know us in Germany or Europe.
Here in North America, it was also important to gain partnerships, which believe in what we do, our products, and solutions to give you the opportunity to prove yourself and start winning projects. Our experience in Europe and the rest of the world is playing a big role since we have already business cases or case studies that we can replicate in North America.
Have you found that you’ve been able to take some of your European relationships in your traditional markets and carry them over into North America as you guys are entering the market?
Some of these relationships were already there and help us to make the bridge because some of the European customers have become part also here in North America. It’s a mix between new relationships and relationships that we bridge from Europe to North America.
You talk about differentiation. For me, I talk to people a lot about the customer experience. Customer experience is critical, and not fully understood by most chemical companies or B2B industrial companies. We often think of customer experiences as more B2C and yet we’re all individuals. We work with individuals, even though they’re in a business context. What does that mean to Vink? What do you guys think about that? What makes you different? How does Vink differentiate itself versus its competitors?
The first part, what does the customer experience mean for Vink, is not just B2C. It’s also B2B. For us, it’s a holistic experience that makes such an impact on our customers that motivates them to stay, work, and rely on us. We try to lead this through our DNA. According to our name, we develop our DNA, which means Value.
The Value is we create and value this for our stakeholders. We are there for the customers ensuring availability, quality, on-time delivery, and being open attitude. This leads to the I, which is Innovation, being flexible, open-minded, going with the changes, and also with the time. The next for us is Nexus, which is also working together with our customers, partners, and connect. Finally, the K, which is for Kaison which is trying to do all the time better.
The customer experience, we try to summarize it as DNA for us. In the second part of your questions, how do we differentiate from the competitors? We are a mix and hybrid. We are a global international company, but because of our side and lean structures, we are flexible and can react faster than a bigger corporation to specific customer needs. We put a lot of effort into customer intimacy to be there because, for us, it’s not just whatever customer. They are important to us, so we rely on them. That’s one of our main differentiations.
I would add on maybe 1 or 2 things. You’re completely right, Victoria, when you talk about the general literature and teaching in a lot of universities and courses that focus on B2C. There’s a lot of study about consumer psychology and why are they buying a Rolex, Louis Vuitton, and so on. That’s super interesting, a lot of psychological behavior. I’m not saying it’s stale, but it’s viewed maybe as traditional in stale industry chemistry.
There may not have been enough studies or focus on that psychological aspect or that human aspect. It’s a lot of science, product, efficacy, toxicology, and structures. What makes us a bit different is that we’ve still kept at this medium-sized level of humane approach with our Vink DNA. One of our strengths is that we have a lot of different nationalities within the company, so different languages. We have still this nexus mentality.
We have different nexuses’ being South America, North America, Europe, Asia, and so on. It’s a bit familial. We’ll not refer, “I’m not at all responsible for X, Y, Z. I have to refer you to this person and the next person.” It’s, “I’m responsible partly for that, but I’m a specialist for that.” We’re not afraid of making decisions.
We’re pretty agile and not afraid yet to do things because we’re confident in the things that we’re allowed to do and that we can do. We’re not afraid of improvisation and finding different solutions, delivery dates, and routes of transportation. That’s been an interesting thing. What I would say regarding a holistic customer experience is that it’s not only about just selling a product. You have to address the person as well.
That’s what you’ve been saying in your question, but not only that. Sometimes, you have to become clear to us within our regulatory work because we do have a strong regulatory team. You have to cooperate within the entire supply chain. From the first raw material producer, downstream or somewhere in the midstream producer about the safety data sheets and delivery of data. Maybe not always full composition because that’s confidential business information but any data or consultation you can give if you can explain the synergies of your product with their product and your customers’ product you can explain it to them.
Sometimes frankly, even the customers, they’re chemists, but they don’t know our products that well, or maybe they don’t even know their products that well. Nobody can know everything. Sometimes they say, “Give me 10 tons and I’ll put a lot of it into my product. Maybe half of the dosage would’ve been good. If we can also save our customers some money, they’ll develop more trust. He also has my interest at heart.” There’s a lot of consultation and work pre-product, during product, and post-product.
Your point about the customer not fully understanding their bandwidth and ability to know everything about every product and alternative that’s out there is not there. You can’t do it. It’s infinite. There are infinite choices, and you can only make a few. The easiest thing to do is keep doing what you’ve always done, to keep buying the same product and making the same formulation. It’s not necessarily the right thing and the most profitable. It doesn’t necessarily satisfy your customer and your customer’s customer, but it’s proven, expedient, and low risk.
I don’t think the low risk with high value, but it’s easy to confuse low risk with the fact that, “That’s where I’m going to make maximum profit.” Maybe not. It’s a degradation of your business if you don’t keep trying new products, formulations, new behaviors, and new activities. That’s interesting. You’re working across a variety of markets with a variety of people. How do you strike a balance? How do you balance the different needs of those markets, regions, and the customers that you sell into?
We have our strongest markets still. We have already a footprint where customers know us well through the years. This is still our main focus, but it’s the time when you need to decide whether to stay there or to go to the other regions. It’s a step-by-step through the development of the company because we also have grown on people and products. It’s time where, where do we want to invest? In this case, for example, North America is a new, exciting, big part of it. It’s not to try to do everything at once to be focused and conscious of which steps you are taking, but not to be afraid. It’s the balance of focusing, but not being afraid of going there, investing, and trying. It’s also part of the balance to keep the business that we have, but also gain new experiences in new business and new markets.
That makes sense.Customer experience is not only about selling a product. It's also about addressing the buyer as well. Click To Tweet
One of our added strengths with both balancing the market needs is many companies. That’s not wrong, we do that as well. I’m not trying to be the smart guy here for the entire world. You make your strategy. I made this strategy. I made this business plan. I need to follow through. I feel that sometimes. It’s interesting, but I can’t say the final result. We’ll see in a couple of years. One of our strengths as well is that we have some seasoned people within different markets who have worked in some industry, be it a paint industry or biocide industry, or oil and gas industry within the different regions.
We’re there and listening. It’s not a deductive strategy where it’s been done abstractly from the top brass and then we have to do it because the market says so, Gartner says so, and McKenzie says. We’re also listening, like, “What do you guys need?” We’re aware that we can’t do everything, but within this constant communication, a global mindset, but on a local level. What do you need? What is happening here? What is happening there? We’re trying to service as is, and then from there, develop a strategy.” It’s not necessarily a preconceived strategy that we have, but we also can adapt it and listen to what they need which comes back to this customer experience.
That’s critical. If you develop a strategy within a vacuum, it’s going to get sucked up. At the end of the day, your strategy has to be connected to what your customers and the markets want. Frankly, the beauty of a small young company is the ability to be nimble, innovate, and try new things as you seek to establish what your platforms are going to be.
This part of the beauty and the position we play in the market is international, but still on the size. The culture is pretty hands-on like, “What Branko says, try it.” You then go and do it. At the same time, you need this focus on what we are developing more and more. We are growing on a personal. Certain structures need to be there. It has been for us pretty interesting and challenging, but also fun growth to find this balance.
Is it hard to find people within the chemical industry as you’re trying to grow your team that is able to do that, see the opportunity and say, “I’m going to do it,” that fit the DNA that Vink is developing? Is it a challenge to find people that fit that DNA?
Yes. The US has been discussing a lot about this big resignation wave and quitting. I feel like a lot of things that happened in the US also mentally spoke over to Europe after some time. We mimic what’s happening or the same discussions. We start the same ones that you guys might have had a couple of months or even years ago. It’s difficult. You have to strike the balance between the philosophy of hire for attitude. You may find an excellent person, but who has not been within the chemicals industry. You know you can teach them.
If you follow the 80/20 rule, the Pareto Principle, nobody needs to know 100%. You can teach whatever that person needs to know within a reasonable amount of time and have internal onboarding and so on. Maybe even eLearning if you have these things within the company so they can get to a good level and strike the balance between, “This person has the skills.” That is rarer and that is not easy to find. “This person has eleven years of experience in the biocide, a regulatory field, or is a chemist exactly in the biocides field. Great. We found another one.” That’s not that common and has not been easy.
You tend to more hire for attitude and capability, and train them where you need them trained.
We’ve also had specialists, but it has been working out well.
It feels like the world has been in a bit of turmoil over the last couple of years. Everything with the pandemic and supply chain challenges. You’ve got the Russia-Ukraine conflict, which is having a pretty significant impact on global supply chains again but also thinking about energy and feedstocks in Europe, and then inflation, which is here. We can’t deny that everybody’s experiencing inflation. How is that affecting your business, and how are you responding to that?
I’ll start with the dynamic and build up on that. We have looked into Eastern Europe in general as a potential market, but frankly, even pre-pandemic, we haven’t had much exposure there. That luckily hasn’t affected our business in any significant way. What you’ve said with the energy crisis, inflation, and supply chain has been a big challenge. If you don’t get your raw materials or your finished products from Asia, wherever you want to deliver them, you cannot deliver them to Asia, that’s difficult. Inflation has been interesting, whereas before, suppliers or customers were willing to do contracts to go over 2 to 3 years with a price binding.
Now we have, for example, contracts with suppliers or customers that can change prices on, I won’t say daily basis, but it almost feels like it, a monthly basis. You don’t have any price stability or you cannot forecast that my cogs are going to be this and that for the next three years. It’s been a lot more negotiation, even maybe more close communication. From the legal perspective, more uncertainty I’d say because of that inflation. Everybody wants to get a good margin, which I’m sure everybody deserves, but it’s become more difficult for everyone, I feel.
Diana, do you see it the same way?
Definitely. It’s this balance. Communicating way much more with the customers, but with the supplier at the same time, because you need to align these two. Assure one and assure the other at the same time. It’s more communication effort and being way much closer in order to adapt fast to these changes. Again, communicated changes in case material are not here or price is here. If you have this communication with both sides, they are in the same situation.
A lot of the time, it’s not like we are alone. Everybody knows what’s happening. The understanding also for that situation everybody’s looking for. Being in the business, remaining there, growing, the understanding is there. They know, “We need them because they need us.” It’s this partnership. I would say in the majority of the cases, if you are there and work there, they know that they help each other. You need to be there because they are in the same boat and same supply chain issues.
Communicate, adapt, and negotiate a lot, it sounds like. What’s next for Vink? Where are you guys heading as we lead closing out 2022 and moving into 2023? What’s next for you?
For me, I’ve been transferred to the US. I’m now based in the US since May 2022. It is to grow the region, grow the team, and adapt to the US, learn and absorb everything as fun as I can in order to establish the right structures. Find the right people and the partners that allow us to gain more footprint in the region. From the perspective of these new regions, developments that we are aiming for is the next big step. It’s to invest here and stay here. For me personally, but also from a business point of view. In the beginning, everything started through the merchant acquisition project. That’s how we started in the regions. After that, we needed some partnerships and exports, but now on the market strategies entries, we are at the point to be direct and invest here. That will be the next years.
Branko, from your point of view?
From my point of view, I’m also responsible for HR globally, and still, further build the team. It’s been a challenging and interesting thing because we’ve started with teams and being global, especially in the regulatory department. It’s because they’re situated not everywhere in the world, but in multiple sites. We’ve always been a virtual team.
The transition was not too difficult. I further build the team and also the virtual team, because it’s virtually impossible to meet physically. We have done that in June 2022 with a lot of people from everywhere. That was a great success but still integrate the four different cultures. We have a couple of surprises for our employees, which is a good thing, and some tools to help us become more of a unity. Finding the right-minded people is always a challenge.Do not be afraid to jump into different markets and start investing. It's part of keeping balance, trying new businesses, and gaining new experiences. Click To Tweet
We’ve touched upon that already, so it’s difficult. More so for the chemicals market, because an affinity is of course preferred, but the strategy also helps a lot. In general, for the company, scaling and becoming more efficient and effective is everybody’s dream anyway, but scaling will be important. Continue to learn more from my part and my team’s part about stages from TSCA.
There is also about Korea, there’s the K-BPR and K-REACH. Turkey has introduced a new REACH, which is called KKDIK. They have the Turkish BPR. There is a lot of this nuance. The more products we introduce in any given market, the more expertise we got to have. There are requests that come from the agriculture sector and food contact material sector. It’s always going to be an interesting journey to learn more about anything, chemistry, and all regulations.
It sounds like growth is on your horizon one way or another.
Diana and Branko, thank you for joining me on the show. I appreciated getting your perspectives and learning more about you and Vink.
Thank you for inviting us.
Thanks, everyone, for reading. Keep reading, following, and sharing the show. We’ll talk to you again soon.
About Branko Ulaga
Branko Ulaga is Chief Legal Officer for Vink Chemicals, leading, and advising on global regulatory, compliance and legal as well as global HR & strategic matters. He studied law at Luwig-Maximilians-Universistat, Munich, Germany and an Executive MBA in Hult International Business School in London.
About Diana Lima
Diana Lima is Business Unit Director North America for Vink Chemicals Diana grew up in Mexico, spent the last 15 years in Germany, and is now living in LA. Diana graduated with a Masters in Engineering and an MBA in Hamburg Germany and has worked in the chemical industry for 10 years. Diana has spent the last three years with Vink Chemicals, first as the Chief Marketing Officer (marketing and sales for the Oil and Gas division worldwide) and now with responsibility for North America with the objective to develop and grow in a new region for Vink Chemicals.
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