Challenge: Too Much Demand, too few resources, and too little time
Since Chemlock Nutrition’s first sale to the animal nutrition industry in 2013, the company’s primary focus has been to leverage its MIT-trained chemistry expertise and chemical production insights into developing high-purity and innovative feed additives for the animal and livestock feed industry.
By 2020, Chemlock was growing rapidly, having developed an incredible product portfolio and strong customer demand. This is particularly impressive considering that its sales and R&D “teams” consisted of only one person each. Much of the company’s success is owed to the strong collaboration between these two individuals—sales would identify customer problems (such as deficiencies in their current feed mix that resulted in suboptimal livestock growth) and R&D would develop strong products to solve those problems.
But with its ascendent growth, Chemlock had surpassed ownership’s operational comfort level. Quite simply, the company had much more demand for their products than it could fully capitalize on, given its current infrastructure. The company’s leaders knew they needed an experienced financial partner to fully capture the upside of this tremendous opportunity.
Solution: Strategic investment in people and systems
Roebling Capital partnered with Chemlock’s ownership and Strength Capital to effectuate a transaction in June 2021. Our approach was to focus on developing the necessary resources to create the infrastructure Chemlock needed to maximize its growth potential. These planned resources included significant investments in both people and systems.
Post-closing, Chemlock first hired a CFO to enhance financial and analytical capabilities, and soon added several other much-needed hires. This included multiple specialized salespeople to focus on the livestock industry and a nutritionist plus support staff to continue creating value-added products. The company also added logistics professionals to increase supply chain and shipping efficiencies. Finally, a Board of Advisors was created, consisting of long-time industry professionals who can impart wisdom and provide warm introductions within their vast industry network.
On the systems side, the CFO has led the effort to implement an enterprise resource planning (ERP) system. The ERP system now allows Chemlock to have enhanced visibility into various areas, including financials and logistics, to monitor business trends in real time. The ERP system’s output includes a key performance indicators (KPI) dashboard, which allows the various departments to track relevant metrics and spot trends much quicker, both positive and negative. The sales team is in the process of implementing a customer relationship management (CRM) system, which will allow them to manage customer accounts more reliably and efficiently, leading to increased sales productivity.
Today: The right ingredients for growth—and shareholder ROI
Chemlock continues its rapid growth path, now enabled with the proper infrastructure to support and facilitate continued expansion. These investments will allow Chemlock to reach its full growth potential, ultimately culminating in significant shareholder ROI.
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ABOUT THE AUTHOR
David Graham is an Associate at Roebling Capital Partners, a lower-middle-market private equity investment firm.
