Becoming Acme-Hardesty

An 80-year legacy of success through innovation

What happens when you take 100 pounds of animal fat and you split (hydrolyze) it? Many people in the chemical business understand what this means - you get roughly 90 pounds of fatty acids and about 10 pounds of glycerine. You are probably wondering why this is even important. Well, back in 1949, companies would sell glycerine to the makers of ammunition for the United States government. Glycerine from tallow went right to the makers of bullets and bombs as the United States was gearing up for the Korean War. This detail is an important piece of the Acme-Hardesty history.

In the 1940s, there was a lot of tallow and very little export of that tallow from the United States. Jacob Stern & Sons had already been in business for just about 92 years. Jacob Stern, who founded Acme-Hardesty in 1942, had relationships with most renderers from the Missouri River to the east coast. There were hundreds of these renderers at that time, while today, there are probably fewer than two dozen in the entire country.

At the time, Jacob Stern mostly sold to soap manufacturers, candle makers, and manufacturers of fatty chemicals. These soapers included Procter & Gamble, Lever Brothers, Fels Naptha, and Colgate. Back then, the soap manufacturers, and others, did not maintain their own purchasing departments, but bought through dealers like Jacob Stern & Sons. This business position provided the opportunity to do more with tallow than just sell it to others.

Bill Hardesty, co-founder of Acme-Hardesty, had believed he figured it out. Phil Bernstein recalled, “[his] proposition to my grandfather was that we take the tallow that Jacob Stern had access to, and split it to get the glycerine, to sell to people who were making ammunition and munitions…” Hardesty was a chemical engineer by training and reckoned that there was a fortune to be made by selling raw material to the government to support the war effort. Glycerine, at the time, was worth close to a dollar a pound. The tallow splitting idea had appeal and, before long, open kettles were added to the Jacob Stern facility at Tioga St. and Aramingo Ave in Philadelphia, PA. Bill Hardesty went on to start another fatty acid business in Dover, Ohio. To this day, that plant still exists, in a greatly transformed state, and is owned by Arizona Chemicals.

At that time, tank cars only held a maximum of 45,000 pounds; then later, sometime after the Korean War, were increased to 60,000 pound cars, which was considered a huge innovation.

During the war, households were encouraged to save used fat from frying bacon and deliver it to collection points in open cans. Thus, tallow, as a raw material, was delivered to the Jacob Stern plant in every sort of conveyance imaginable. The birth of Acme-Hardesty involved adding tanks for the reaction of the tallow with splitting agents and heat. These tanks were called Twitchell kettles.

They were open top and very dangerous. What came out of the bottom of each batch was “sweet water”, or glycerine, approximately 12- 14%. This was tapped off and sold to the ammunition makers. The fatty acids were a by-product of the reaction. The glycerine did not have to be concentrated for sale as its purity was not a concern. It was filtered and boiled a bit to drive off some moisture, but the war effort did not require 99.7% USP glycerine, today’s standard highgrade of glycerine, to make bombs.

By the mid-50s, things had changed markedly. This was driven by the industrial boom as well as the economic growth following World War II. During this time, the Philadelphia plant had grown tremendously to include more splitting capacity, hydrogenation, and distillation of the fatty acids. So, between the Korean War years and the mid-50s, there was a huge change in the market. The demand for fatty acids increased at a time when the world stopped making bombs and bullets, and naturally, the value of glycerine declined significantly. Tallow, at the time, sold for only 3 or 4 cents per pound, meaning the value of the parts of tallow were not very high either.

During the late 50s, the glycerine that was tapped off of the splitters was deemed valueless and went directly into the city sewer. The reason for splitting tallow had evolved into producing fatty acids to sell to manufacturers of all kinds of products as the post-war economy boomed. The uses and the market for fatty acids expanded at a tremendous rate for a number of years. The number of plants around the country selling fatty acids in the late fifties and into the early eighties was around a dozen, Acme-Hardesty being one of them.

Even though Jacob Stern & Sons was a family-owned company, there were no members of the family who worked at Acme-Hardesty until Phil Bernstein was handed the presidency in 1971. This took place after the untimely death of the president of Acme-Hardesty. When the company learned of their president’s death, Phil Bernstein was asked to take over the company as there was no one else who had any understanding of the business. Bernstein was qualified, by virtue of many years of working in the plant and his familiarity with a number of the people who worked for Acme-Hardesty.

In 1971, Acme-Hardesty had about 100 employees, of whom ten were supervisory or quality control personnel. Acme-Hardesty ran the plant seven days a week, 24 hours a day, 365 days a year. Acme-Hardesty believed that, by running the plant on Christmas day, they would have a “leg up” on competition.

Although there really was no “leg up.” Acme-Hardesty had developed into an efficient producer and over the next ten years worked its way up to becoming the fourth largest producer in the country.

Some would say, Acme-Hardesty had started the business the wrong way. Acme-Hardesty was a glycerine producer first and a fatty acid producer later. All of the growth in processes and equipment were added onto the old splitting plant that was integral to the old Jacob Stern & Sons tallow facility.

This is where Acme-Hardesty used secondhand equipment in order to spend less than the competition. There were others who followed the same route such as, A. Gross Co. in Newark, (now out of business) and Darling & Co. (sold to Uniqema).

It took several years for Acme-Hardesty to turn the message into a plan. Just to list a few: air and water pollution, a rash of fires in the plant, constant quality problems – mostly stemming from the type of plant that Acme-Hardesty ran and constant labor difficulties. It was the labor difficulties that ultimately led to the new model of Acme-Hardesty.

Although Acme-Hardesty’s labor union closed the plant during a month-long strike, the company found a way to buy from others and continue to keep its customers supplied.

During the month-long strike, Acme-Hardesty learned a lot. Needing to meet the sales commitments, Acme-Hardesty bought from its competitors and drop shipped to its customers, which was deemed very successful. Acme-Hardesty found that it excelled at what it did best, which was to take care of their customers.

Manufacturing was not the strength of the company. Acme-Hardesty only had so much capital to invest in plants and equipment. Not to mention, the environment was changing to make it less attractive to try to squeeze out a return on investment the “old way.”

Acme-Hardesty needed to find its “sweet spot.” The plan that emerged was to shut the plant down and become a middleman/dealer. On October 30, 1980, Acme-Hardesty ceased to be a producer and the new era began. In fact, what Acme-Hardesty did was change the business model.

Acme-Hardesty thrived in its role, bringing the supply and the buying markets together.

In late 1982 Phil Bernstein, who was President at the time, had the bright idea of sourcing from Malaysia whom Bernstein had contacts with. Bernstein recruited Henk Peeters, who was located in San Francisco at the time, and ran the west coast tallow exporting operation, to make contact with the Malaysian producers to see if any of them were ready to export to the U.S.

Henk Peeters was the right person for the task. He had spent many years as a young man in Asia and was wellknown in the fats and oils community. Through his contacts, Acme-Hardesty started importing one container at a time from Southern Acids in 1983. Gus Lim was the go-between then as he is now. Acme-Hardesty’s timing was spot on because it was not long before the market for all fats, oils, and fatty chemicals got hot. Acme-Hardesty’s domestic sources had dried up one by one and we were able to replace them from Southern Acids.

Acme-Hardesty could have gone out of business had they not replaced this source. The biggest challenge was getting customers to accept perfectly good products from an unknown part of the world. When Acme-Hardesty mentioned Malaysia to its customers, many would ask, “Don’t they have lions and tigers there?”

Acme-Hardesty’s sales job was further impacted by the lead time required to move the product that distance. Therefore, Acme-Hardesty was forced to learn more about warehousing and distribution. It was Acme-Hardesty’s ability to solve these problems, obtain the market information, and source from an unknown part of the world, that has led to our success.

The transition from manufacturer to “dealer, distributor, and middleman” had been accomplished.

In the mid-1980s, Acme-Hardesty decided that they could no longer deal through others to source castor oil and castor derivatives. President Bernstein went to Brazil, which at that time was the dominant producer/exporter in the world of these products, and introduced himself to the Wei family of Braswey. Over several years, Acme-Hardesty became closer and forged a trading relationship that still exists. While Brazil is no longer the market leader that it once was, Braswey is still an important source for us. Establishing Acme-Hardesty in Brazil was a true leveraging of the company's skills and culture, by using market knowledge and profiting from the changes in the market.

Acme-Hardesty is still accomplishing this with others today, such as Nidera and Akzo, being prime examples. Even with the success of Acme-Hardesty in Brazil, there was a pressing need to avoid being complacent. As the company was building the business in Brazil, India was overtaking Brazil as the number one producer of castor products.

Everyone in the business wanted to get in on the castor action in India. Phil Bernstein recalls on one trip, sitting in a hotel conference room for two days and meeting a procession of so-called “castor derivative producers.” He went on to say, “I think we met no fewer than twelve [producers] on that stop alone.”

Acme-Hardesty did business with anyone whom they deemed to fit their high standards and slowly eliminated any bad actors when they methodically disappointed the company. There were many expensive lessons to get to the few good suppliers Acme-Hardesty has today. Bernstein recalled these lessons, calling them “learning from our mistakes.”

Going further to say, “they were not insignificant.” While other companies were investing in fixed assets, Acme-Hardesty’s investment was pursuing intellectual capital. Acme-Hardesty sought to make money from what it knew best and by serving the markets well: by providing value. The lessons learned in the past have been ingrained into the company’s culture and its daily process when making decisions today.

The next big change took place in the early 1990s when Acme-Hardesty felt that it needed bulk fatty acids to truly grow its business. By 1990, Acme-Hardesty had many imitators bringing containers into the U.S. and, even though it was growing in volume, profits and organization, Acme-Hardesty needed a way to stay ahead of the competition. Other companies were bringing bulk fatty chemicals into the U.S. and Acme-Hardesty knew that it could market them successfully at lower cost than previously.

The new business had begun as the key to volume and was definitely dependent on bulk shipments. Hudson Tank Storage and Stolt Tankers helped Acme-Hardesty bring its first parcel into Newark, NJ in early 1991.

Acme-Hardesty was not alone for long, as Acidchem and other competition were beginning to catch onto this innovative change. Acme-Hardesty was able to make this change due to the flexibility that its business model allowed and to take advantage of market changes, if not create them wholly.

Acme-Hardesty would not be complete without the mention of a specific, outstanding line of products. The company had been in the concrete business since 1979 when the lone outside salesman, Tony Gulotta, asked for the opportunity to sell oleic acid to the concrete block manufacturers in Pennsylvania.

This application for a fatty acid had been developed by the U.S Department of Agriculture as part of a program to find new end-uses for domestically produced agricultural commodities. This particular end-use was practically brand new and Acme-Hardesty introduced it to many in the market.

Although other, much larger companies were quick to add it to their product line, Acme-Hardesty was first on the ground and found the market attractive from the beginning. Margins were excellent but the selling costs were not ideal.

Acme-Hardesty expanded the product line modestly, and aggressively in terms of geography. This opened solid market shares in many parts of the United States including the Midwest, Texas, and the Southeast. Acme-Hardesty was strongest in its home territory where Mr. Gulotta became one of the deans of the concrete additive business.

Much like the addition of the concrete chemicals line, Acme-Hardesty added product lines through partners, like Sharon Laboratories, who produce preservatives such as parabens, specialty, natural and natural-like preservatives.

Acme-Hardesty’s relationship with Sharon Laboratories dates back to 1989 when the company hired Mike Zohar.

Zohar’s job at Acme-Hardesty was to develop new products for the business so that it would not be totally reliant on fatty acids. The timing was ideal, as Sharon Laboratories, the small Israeli-based business, had reached a scale where it could then consider exporting its product. President Bernstein reflects, “it took years of painstaking work and investment to get Sharon to the point it is today.”

Acme-Hardesty is proud to have a relationship with such longevity as it does with Sharon Laboratories as well as globally recognized customers such as L'Oreal.

The plastics additives business began in the early 1990s to further expand Acme-Hardesty’s product line. Acme-Hardesty believed that many of the products that it could introduce to plastics manufacturers would put Acme-Hardesty in a position to also offer basic fatty acids into the plastic additives business. This line was meant to be profitable on its own and a “door-opener” for the core business. Acme-Hardesty retained Frank Dorn who developed the Jenkinol marketing approach. Under Frank Dorn’s guidance, Acme-Hardesty learned about these products and how to present them to the various producers of plastic films and forms.

Although the strategic thinking was correct, it had taken many years to get a rationalized business going in this area. At that time, Acme-Hardesty learned that its core competency is commodity products and not the small volume technical sell items. Our company is still driven by the want to change and evolve, and starting in 2018, we expanded into small volume technical sales. Looking forward, President Bernstein believes, “that the future is brighter than ever with our current plan.”

Acme-Hardesty negotiated a three-year exclusive agreement with one of the Salim Group companies, a new manufacturer located in Indonesia. Acme-Hardesty did a great job for these companies by reaching the target quantity in the U.S. market in roughly a year and a half. The partnership, unfortunately, was flawed from the beginning because Salim had never intended to have a long-term relationship with Acme-Hardesty.

Before the end of the three-year contract, Salim had its own people in place to take over the business here in the United States. While Acme-Hardesty was able to purchase from them for a short time as they were getting established, Acme-Hardesty eventually lost their supply and had to scramble in the market to buy alcohols.

This situation persisted until 2005, when the new agreement with VVF kicked in, a current competitor.

Acme-Hardesty is now well established in the marketplace as a source of fatty alcohols.

Again, a return to what Acme-Hardesty does best, which is, bringing suppliers and customers together through their expertise. And that’s why we do it! How could the history of a company not include the people who made this history?

Acme-Hardesty is the story of an opportunistic beginning, a transition through a period of finding out what it did best, and a maturation into an organization that is positioned to be greater than ever.