A long and winding road has led to a sharp focus on specialty chemicals.

What began as a small oil refinery in eastern Kentucky just over 90 years ago has grown into Ashland Inc., one of the world's leading specialty chemical companies. From the beginning, the company's founder, Paul Blazer, instilled in Ashland employees a passion for hard work, integrity and results - qualities that endure today.

Now, under the leadership of Chairman and CEO Bill Wulfsohn, Ashland is a global company operating in more than 100 countries and providing innovative products and services that add value to things that people use or come into contact with every day. The chemistries we provide enable pharmaceuticals that excel in form and function, anti-aging ingredients in skin-care products, more sustainable building products, lighter yet stronger wind-turbine blades and advanced recycled motor oils that reduce energy consumption.

While Ashland's focus today is clearly on creating a compelling future for our customers, investors and employees, we think it is worthwhile to share some insight about where we've come from, how we reached this point and our goal to be viewed as the best specialty chemical company in the world.

Ashland's legacy traces back to 1924 and a refinery in Catlettsburg, Ky., USA, which later came to be known as Ashland Oil & Refining Company. This refining and marketing focus took the company into a number of other affiliated businesses including road paving and construction, oil exploration, coal, a premium-branded motor oil business (Valvoline), a chemicals distribution business and specialty chemical businesses - among others.

As the 1990s progressed, it became clear that Ashland's regional position in an increasingly consolidating refining industry made its investment less than ideal. So, the company began to look for a means of exiting the refining business in a value-creating manner for its shareholders. The first key step in this journey was taken in the late '90s when Ashland formed a joint venture with Marathon Oil - a decision that would ultimately give Ashland the ability to exit fully from refining and marketing.

Under the leadership of Jim O'Brien, who served as chairman and CEO from 2002 - 2014, Ashland completed a remarkable transformation from a petroleum refiner and marketer with diversified holdings in chemicals and highway construction into today's global specialty chemical company.

How it all started

Employees during the early days at the refinery in Catlettsburg, Ky., USA.

An Extraordinary Transformation
The transformation accelerated significantly in 2005 when Ashland sold its stake in the refining joint venture to Marathon, thereby exiting its historical core business. This breakaway from its refining foundation created both the opportunity and critical need to refocus the company's future mission.

As part of its exit strategy from refining, Ashland took a close look at its internal strengths and competencies to reassess its strongest and most differentiated qualities. The ambition and goal was soon clarified: to achieve a differentiated position as a global specialty chemical company.

Specialty chemicals was a business Ashland knew well through its performance materials and water technologies segments. It was also a business with attractive characteristics: long-term growth potential, strong cash generation, attractive margins and higher barriers to entry. However there were many specialty chemical companies around the world. Becoming a truly differentiated specialty chemical company demanded a fresh, strategic approach.

While most specialty chemical companies focused on a specific chemistry or manufacturing approach, Ashland chose to focus on different characteristics: gaining positions in specific, increasingly global end markets; leveraging its unique core competencies, and seeking businesses that can achieve global No. 1 or strong No. 2 market positions.

The next transformative step was the 2006 divestment of Ashland's APAC road-paving and construction business. To demonstrate its commitment to building value for shareholders, Ashland used nearly all the proceeds from the APAC sale to fund a special dividend and a share-repurchase program. Ashland also intensified its search for acquisitions to further its transformation, which led to the acquisition of Hercules Incorporated in 2008.

Sales 5.1 billion

1 For 12 months ended September 30, 2015.

2 Ashland includes only U.S. and Canada in its North America designation.

The combination of Ashland and Hercules delivered a variety of benefits. Hercules had leading positions in cellulosics and specialty papermaking chemicals, helping to construct a solid foundation of specialty chemicals. Hercules also brought a broad portfolio of renewable chemistries and exposure to global growth markets such as personal care and pharmaceuticals. Perhaps most important, Hercules presented Ashland with a collection of growth businesses in which Ashland could continue to invest.

While the acquisition of Hercules was a sizable undertaking for Ashland, the synergies between the two companies were readily apparent. Within 18 months, and in spite of one of the worst global recessions in history, the integration of the businesses was largely complete, creating a top-10 global specialty chemicals business.

Defining Moments
By 2010, Ashland consisted of three specialty chemical businesses: Ashland Aqualon Functional Ingredients, a global leader in cellulose ethers; Ashland Hercules Water Technologies, a global leader in specialty paper-making chemicals, and Ashland Performance Materials, a global leader in unsaturated polyester and vinyl ester resins. These businesses were complemented with the high-margin Valvoline business, which holds the No. 3 spot in passenger-car motor oil in the U.S., and Ashland Distribution, the second-largest chemicals distributor in North America and third-largest globally.

However the transformation of Ashland was not complete. In March 2011, Ashland sold its Distribution business, which represented one third of its global revenues. A mere two months later, Ashland announced a defining transaction - the intent to acquire International Specialty Products Inc. (ISP). With $1.6 billion in 2010 sales, ISP was one of the world's leading privately held specialty chemical companies, with a global footprint and the ability to develop and deliver sophisticated, performance-enhancing chemistry to a multitude of industries.

The completion of that acquisition in August 2011 provided significant strategic benefits to Ashland, strengthening its position in a number of important, high-growth, high-margin global end markets. ISP's innovative portfolio of chemistries included anti-aging ingredients for use in skin-care products, advanced styling and fixative polymers for hair-care products, and active ingredients for gingivitis control in oral care. ISP was also a large player in the pharmaceutical markets, offering one of the broadest lines of excipients available.

ISP also broadened Ashland's portfolio of water-soluble polymers and global research and development capabilities. And most important, the acquisition deepened relationships with existing customers and enhanced penetration of key growth markets. 

In 2014, in yet another step toward focusing on specialty chemicals, Ashland Water Technologies was sold to a private equity buyer. Today, Ashland is well positioned to drive innovation that is both meaningful and valuable to customers through three commercial units: Ashland Specialty Ingredients, Ashland Performance Materials and Valvoline