You're listening to Bloomberg Business Week with Carol Messer and Tim Stenovic on Bloomberg Radio. Well, you know what, Maddie, we had some data are out earlier this morning. We talked about with Scarlett and Romain. It talks specifically about output at US factories up the most in January, by the largest amount in early a year. So we're talking about improving supply chains, firmer demand, getting and giving some relief, if you will, to what's been a really challenge manufacturing sector.
So much needed relief after the past couple of years of supply chain shocks. Right, it's been crazy. Right, We're just talking a little bit about Cisco and the manufacturing and the and the backlogs just in general. We want to get to our next guest, cust Mattive Holdings is a publicly held UH company. It's got about a one
and a half billion dollar market cap. It makes and sell special specialty materials for manufactory to customers in more than a hundred countries, so it's got a great global perspective. Julie Chartel is the presidency of the company. Just ringing the closing bell at the New York Stock Exchange and that's where we find our via zoom. Julie, good to have you here on Bloomberg Business Week on Bloomberg Radio.
First of all, tell us a little bit about your customers, your business and what vantage point that gives you when it comes to manufacturing and the economic outlook. Sure, thank
you for having me today. It's a real honor and privilege to be here at the New York Stock Exchange and it marks a key milestone formative as a specialty materials company, where you've created through the merger of two former specialty materials companies, Nina and SWM, and so combined, it's a really powerful statement that we're making into the market.
We have complementary technologies that we sell into a diverse area of different categories, whether that's filtration media for cleaner air and water and the strong macro trends behind those things. It's release liners and applications for medical packing, packaging and its tapes and abrasives. Into the industrial space as well, we've seen great strength and really a supply chain that is starting to improve, and that's a great spot to be in as a manufacturer. How would you describe the
overall manufacturing environment today? And what does that tell us about our overall economy. What's kind of an insight that you have because of your work in manufacturing that the rest of us might not. I think it's interesting because
it's a little bit of a dichotomy. We are seeing, you know, the supply chain start to right size after what I would say is two years of challenges in our supply chain in manufacturing, whether that's driven by the rising interest rates, record levels of inflation, the Ukraine War, some of the conflicts in China, or some of the the outcomes of COVID and China. We're starting to see that settle in, and so our supply chain is opening up a bit, loosening up a bit, and that's really
important for our customers. It means we're able to get back to a service level and predictability and lead time that is most valuable to them. And I think what we really recognize as manufacturers is it's important to have a global supply chain, but it's really important to have local supply because during this time, supply and availability became the number one prior already for all of our customers. Hey, Julie,
two questions, So are you back? Are the supply chains back to where we were pre pandemic and all of the bottlenecks. And secondly, you talk about local supply chains, are we seeing more and more companies tap into that change their supply chains, make sure that they're kind of in their backyard. Um. So if you could address those two things, that would be great. Sure. On the supply chain, I'd say we're headed um and headed back to pre
pandemic levels, but still not there. But we're seeing, you know, chemical availability become um more standardized or seeing lead times become more standardized. So the availability is really improving. We aren't seeing a tremendous amount of deflation yet, at least not in the categories in which we compete. We're seeing a start to moderate, but we still have prices at very high levels where most of our supplies um. And I will tell you that we're in the past. Maybe
pricing was the number one discussion with customers. It is supply chain now. And so just as I was mentioning and to your question that local availability and there's different ways to do that, whether that's having manufacturing assets in the backyard of our customers in our markets, or having availability through different means of transportation and quick turn you know,
an agile type of transportation system. It's significantly important because many customers and many suppliers and many manufacturers have learned how impactful it is when some of those materials that we did not anticipate. You know, you anticipate your big commodity materials to have fluctuations like we've seen. We did not anticipate specialty chemicals and some of the other areas
to have the type of volatility that we've seen. That's starting to loosen up and straighten out a little bit, but the local supply chain, the reliability, the predictability continues to grow in importance with our customers. Have you felt any impact from China reopening? Has that impacted you at all? And do you anticipated impacting you? You know, very minimal um. We have a very small footprint in China and a
very small portion of our revenue in China. We're primarily uh North American and European and a little bit in South America, a little bit in Asia, so it's had a very minimal impact I'd say, not significant all right to the US and Europe at your biggest market. UM recession for either of them or how would you describe it at this point, you Lee, I think they're very different.
I mean, we're definitely feeling um some contraction. In Europe in particular, we saw and felt and experienced them, you know, record level energy hikes. We have facilities in France and Spain, the UK and Germany and we felt it in all of those areas. I will tell you what it's helped
us do is become more agile. So we've worked really hard to start and forward by some of those energies, hedge some of that energy cost so that we have greater reliability and predictability, and it's made as very agile with our pricing um so that we have shorter pricing commitments and contracts and different modifiers that are inclusive of different components and some of those specialty chemicals and energy
that had not been in the past. So that's your up and I'd say Europe is where we're feeling, you know, more of a slowdown. It's a little bit hard right now to peel away how much of that is really pure demand contraction and how much of that is just customers right sizing their inventory. Because we know throughout the entire supply chain. There was significant inventory build as customers
struggle to get the materials they needed. They ordered more and more in anticipation of getting their fair share, and as demand starts to correct itself, you know, they're often left with high levels of inventories. So there's a level of de stocking and we're feeling that in North America and Europe, but more contraction in Europe. I'd say our North American business has remained fairly healthy. You know, I'm looking at there's a great function on the Bloomberg terminal.
It's all about supply chains, and basically it looks at who are your top suppliers and then who are your top customers? UM. But when it comes to your suppliers, a lot of it is in the energy space. How would you describe that industry right now? The energy space, I think they're just going through a tremendous amount of change and I think there you know, it's difficult to
predict um the future right now. There's a lot of pressure from getting to clean energy, and then there's the availability and you know, some of the efforts that we're seeing or the impacts that we're seeing in Europe with the Ukraine war and um, you know that created some of the issues that we saw earlier this year. So for us, it's really been about how do we control
our own destiny. Knowing there's this there's lack of predictability in the marketplace and particularly an energy how do we make sure we become more agile, we become more consistent, and we really take control of those factors that we can to push forward through some of those issues and reduce the volatility. And are you still seeing consumer demand for sustainable manufacturing even with some of the volatility that we're experiencing. Yeah. Absolutely. I think sustainable manufacturing is it's
not a it's not a friend. I think it's here to stay, and so it's really important that we continue to move in that direction. And much of our platform from an innovation standpoint is on sustainability. We're often the preferred alternative to plastics for some of our packaging material and medical packaging materials, so it's a really important part of how we move forward. Hey, Julie, twenty seconds, what keeps you up at night? What's the biggest risk in
the outlook? Very quickly if you could, you know, it's just the overall global economy, the factors were moving in the indicators are moving in different directions. When we look at interest rates versus job rates versus manufacturing p m I, typically they've moved in unison and they just they're not quite doing that right now. So it's the lack of predictability. That's why for us, it's really important we focus on
those things we can control. We just merge. We have great synergies, we have great scale, we have great cost reduction opportunities as well as unlocking growth. So I'm thrilled with where we're headed, and we're going to focus on those things that we can control. Well, get great to get a check on your business and talk outlook as well.
Julie Schutel, she is president CEO of Mattive. She just ring the closing belt of New York Stock Exchange and that is exactly where we were just talking to her, so good to catch up with her.