Air Products' Pool receives CIA award
Fertilizer financial picture brightens
Leonard P. Pool, a boilermaker's son who had to quit college and go to work to support the family when his father died, in 1940 launched a company on an idea and borrowed capital. That company, Air Products & Chemicals, Inc., today is a diversified international corporation with projected 1971 sales of more than $300 million. And Leonard Pool, founder and chairman of Air Products, last week was awarded the Chemical Industry Association's Winthrop-Sears medal "in recognition of his entrepreneurial action which has contributed to the vitality of the chemical industry and the betterment of mankind." Born in Minneapolis, Minn., in 1906, Mr. Pool attended public schools and Allegheny College in Meadville, Pa. Before founding Air Products, he was general manager of Compressed Industrial Gases, and held various posts with other industrial gas firms. Air Products has long been a major factor in industrial and medical gases and petroleum refining catalysts. In the past year, the company has made important new thrusts into chemicals and plastics through the acquisition of Escambia Chemical Corp. and the chemicals and plastics division of Air Reduction Co. Simple idea. But Air Products started out from what seems in retrospect a very simple idea: Since shipping and handling of oxygen costs more than the oxygen itself, why not produce oxygen at the point of use? Thus Mr. Pool initiated the concept of iridustrial gases produced by apparatus located near large-volume users. This approach has obviously worked well for Air Products and Leonard Pool likes methods that work. To illustrate his operating philosophy he tells a story about a meeting with a former division manager whose operation wasn't doing well. They had spent a morning struggling with the problems of the operation. It wasn't a happy meeting, Mr. Pool says. During the lunch break, Mr. Pool went to the men's room. The division manager entered the men's room later and, unfortunately for him, didn't see Mr. Pool. After first loosing a string of unflattering epithets mostly concerning Mr. Pool's ancestry, the manager complained to one of his division colleagues that, "that guy doesn't have the decency to look at anything except the numbers below the line," meaning profits. The former division manager had obviously failed to recognize two of
No doubt about it, black beats red everytime. Just ask any U.S. fertilizer producer. For after at least three consecutive years of red ink, the fertilizer industry has finally moved into the black, according to the Fertilizer Institute's latest issue of "Fertilizer Financial Facts." Basic fertilizer producers (representing about 60% of industry sales) participating in the report on calendar 1970 had net earnings before interest and taxes of $15.4 million on net sales of $1.7 billion at the wholesale and retail levels. This earnings figure represents an $85 million turnaround from calendar 1969 when producers showed a loss of $70 million on sales of $1.4 billion. (Net earnings after interest and taxes are not available. Most basic fertilizer producers offer other products as well, and don't separate interest and taxes for fertilizers from those for other products.) But the industry's recovery still has a way to go in terms of a reasonable return on investment. "For a reasonable return," says FI president Edwin M. Wheeler, "earnings before interest and taxes should amount to 15 to 20% of sales." In 1970, this figure was 0.8%. Still, industry earnings have improved. And there are two basic reasons for this improvement, says Mr. Wheeler. First, prices have sta-
16 C&EN APRIL 26, 1971
Leonard P. Pool
Leonard Pool's operating principles: "It helps to make a profit, and don't say anything in the men's room that you don't want others to hear." Earliest entrepreneurs. The Chemical Industry Association established the Winthrop-Sears medal in 1970 to "serve as an inspiration to its members and promote the aims of the association." Fittingly, CIA says, the medal is named after the two earliest U.S. chemical entrepreneurs, John Winthrop, Jr., and John Sears. John Winthrop stands prominently as one of the first Americans interested in chemical science and the development of the colonies' raw materials. He floated a stock issue and built and operated a salt works in Massachusetts in 1648. John Sears set up a salt producing operation at Quivet Neck, near Dennis, Mass., in 1777. He hit upon an idea so radical— using a windmill to drive his p u m p for pumping salt water—that his neighbors dubbed it "Sears' folly." But the idea worked. In his acceptance speech, Leonard Pool observed that the problems of the chemical industry are becoming ever more difficult. But with the perennial optimism of the entrepreneur, he expects that the rewards for solving those problems will be so much the greater. After voicing modest disclaimers to the authority of his opinion, he expressed the hope that the chemical industry will continue to foster the entrepreneurial spirit and that it will not repeat the classical zoological experiment in which a group of caterpillars followed each other head-to-tail around the rim of a flower pot, plodding along a circular path that ended only in starvation without one of them breaking off to find the food in the middle of the flower pot.
Fertilizer prices climb 6% in 1970; sales jump 18% 1969
1970
$1430
$1680
Gross profit (millions)*
$175
$308
Selling, general, and administrative expenses (millions)
$253
$317
$7
$24
Net sales (millions)
b
Other income (millions) Net earnings before interest and taxes (millions) as percentage of sales
-$70
$15
—4.3%
0.8%
Assets per employee
$73,000
$74,300
R&D spending (millions) as percentage of sales
$6
$4
0.4%
0.2%
Average retail price per ton c
$53.26
$56.55
116
119
Average time between sale and payment (days)
a Net sales less total cost of goods sold, b Such as interest and finance charges, c Total retail sales divided by number of tons sold. Source: Fertilizer Institute
