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Dow's Philadelphia Boss Plots Growth

Philadelphia Inquirer
By Joseph N. DiStefano

Crews from Compass Sign Co. L.L.C. in Levittown rolled to Sixth and Market early Saturday, with orders to mount Dow Chemical Co.'s diamond logo on the roof of the new home for Dow's $10-billion-a-year Advanced Materials division.

For nearly a half-century, this nine-story block, a cobblestone's throw from Independence Hall, housed Rohm & Haas Co., the multinational chemical-maker Michigan-based Dow bought for $19 billion last year.

"We have just invested about $2 million in refurbishing the offices," Jerome Peribere, the Argentina-born, France-educated Advanced Materials chief executive officer, told me. Next, contractors led by Clements Construction Co. Inc. will fix the high, spare lobby "to look younger and more future-oriented. I want to create in this building an atmosphere where employees love coming on any morning."

He paused. "It's difficult," said Peribere, "because we have had some redundancies."

It wasn't inevitable that Dow would take over Rohm & Haas' space, let alone its role as one of the few big manufacturers in Philadelphia.

Dow tried to back out of the sale when share prices and chemical sales plunged in 2008-09. Rohm & Haas investors went to court and forced Dow to pay up. Dow warned it would have to cut extra deep to make the merger pay.

After the deal closed, Pierre Brondeau, the Rohm executive who had been expected to head the company's operations under Dow, quit. He now runs chemical-maker FMC Corp., a smaller Philadelphia-based multinational.

Next, Dow told the last workers at Rohm & Haas' 80-year-old Bridesburg plant it will close. Dow laid off 340 headquarters staff and began to vacate 41/2 of its eight office floors. In all, Dow cut 550 locals last year, leaving 2,050 in Philadelphia and at Bristol, Croydon, and Pennsauken factories, the Spring House research and development labs, and the Newark, Del., electronics-materials complex.

Dow hired real estate broker CB Richard Ellis Group Inc. to shop Sixth and Market to new owners or tenants. Beneficial Bank considered the site for its headquarters.

There was no deal by the end of December, when Peribere moved to Washington Square, just a block away from the headquarters. He had been in Indianapolis running Dow's smaller agricultural- chemicals business.

Peribere liked Philadelphia and walking a block to work. "The first weekend that was warm, we took the bikes out," joining his wife, Isabelle, an executive of France's Dassault Aviation who handles relations with Microsoft Corp. "We just rode across the city. It was fabulous. This city is so much loaded with history and a European flavor. It is small and large at the same time."

Peribere decided to keep the top floors of the Rohm & Haas building as he wrapped up what he calls the "Phase One" merger cuts and begins a "Phase Two" expansion, including the hiring of 20 doctoral research chemists, plus staff, at the Spring House labs.

Dow shares have risen at five times the S&P 500 average since the merger. Dow chief executive Andrew Liveris, meeting with investors last week, praised Peribere's "entrepreneurial spirit" and his "profitable" record, and predicted more acquisitions for his unit.

In buying Rohm & Haas, Dow wants to complete its change from a basic materials-maker whose fortunes moved with the U.S. economy, to a maker of specialized products in growing demand around the world.

Rohm & Haas' product menu for water purification, paints and coatings, computers, insulation, and other businesses already accounts for one-fifth of Dow's sales and a third of its profits.

Why base it in Philadelphia? "We have a huge talent pool here," Peribere told me in his tidy office, which overlooks the Liberty Bell and is decorated by a couple of his own sculptures.

He added: "Look at the infrastructure on the East Coast. Our business is global, we want the airport facilities, we want to be able to go anywhere in an easy way. We are going to stay here."

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