Zochem Podcast Episode 1: Why We Invest in What We Do, Part 1

Jill – Welcome to the Zochem podcast. My name is Jill and today we’re uncovering this industry which touches nearly everything in your daily life. We are starting at the very top. I am joined by CEO Mo, the CEO of Zochem. Hi Mo, thank you for being here today. 
Mo – Hi Jill, thanks for having me.
Jill – Of course. How are we doing today?
Mo – Marvelous.
Jill – Yes.
Mo – Another day in Zinc Paradise. 
Jill – We love Zinc Paradise. I’m loving all of this shiny metal all over around us. Shall we dive into our first question? 
Absolutely. And anything you want to know about zinc oxide. I’m here to help tell you.
Jill – I’m ready to learn. So before we dive into the industrial side of things, how did you get into this world of zinc? How early did you discover it and when did it become your focus? 
Mo – That’s a good question. So how I got into it was not such a uh unique story. Uh was a plant manager in a previous company. Uh came up through an operations background in automotive personal care. Uh got recruited, headunted if you will. Uh joined as a plant manager and was uh fortunate enough to have some roles of increasing responsibility to where you see me now. 
Jill – Amazing. 
Where I first discovered it was back in probably high school, probably more university uh where inorganic chemistry was one of the courses I actually liked. Okay.
So, I love to geek it out with the inorganic style. 
Jill – And so, what was it about zinc that drew you to it? 
Mo – You know, the the industry itself, I really wanted to get back into a chemical industry, you know, from the previous roles, they were a little bit more mechanical, a little bit more electrical. Uh, I just wanted to get a little bit more to the grassroots of like where the passion is. So, I can’t say it was zinc specifically, but I’m very happy it’s zinc oxide now in my world. 
Jill – That’s good. It’s good to have something you’re passionate about. It makes you work that much harder. 
Mo – You definitely feel a difference. Absolutely. for sure. Uh so during your time at Zochem, you’ve moved up, as you mentioned, through several roles. What was the most exciting moment during your climb to the top? Uh excitement wise, you know, I’ve I’ve had the privilege of having uh a lens through these different roles. So sometimes it’s been more, you know, firefighting on the ground floor. Uh sometimes it’s been more strategic with my current role. But I’d say the most exciting was uh about a year and a half ago, we celebrated 50 years at our Brampton facility. uh and we celebrated 10 years uh with the opening of our Dixon, Tennessee facility. So that was all done within like 45 days. So within 45 days, I got to reflect, got to pay homage to those who had come before us. Uh give props to the team members who are here who make up our dream team and then to talk to some of our shareholders about what we’re looking for the future. You know, what does the next three, five, 10 years look like? So I’d call that 45day episode. My excitement. 
Jill – Yeah, that’s amazing. That’s such a big accomplishment for the company. So, every leader needs a way to recharge. Outside of the world of zinc, what makes you tick? How do you keep yourself busy when the furnaces are off? 
Mo – Uh, I would say my my two kids do a great job of keeping me busy, so I got to give them uh first and foremost shout out there. Uh, my son’s always ready for a pickup hockey game. My daughter is always setting up some kind of dance party in the house. 
Uh, and then my wife and I just like to be more outdoors. So whether that’s strictly with her green thumb near the garden, whether it’s me working on some cars, uh that’s kind of what floats our boat. And uh most importantly, hopefully we can do it with friends and family, which uh I find the social network you have in at work is equally important to the social network you have outside of work. So just harnessing both finding that balance, if you will. So yes. 
Jill – Yeah. Having the family be all-encompassing, both your blood family as well as your work family. 
Mo – Absolutely. 
Jill – So, people are calling Zochem an industry mover and shaker lately. You’ve been in the middle of some very aggressive capital expenditure. Where is that money actually going? 
Mo – You know what, very important question there because it’s nice to know that we’re a mover and shaker. So, great to hear from someone like you, Jill. We are basically investing in a multitude of different growth aspects. So, I’ll start with the most simplest from a manufacturing side. We’re investing in bricks and mortar, right? We’re we’re putting in new furnaces with new optimization, new process controls. So that’s from the fundamental of turning the zinc into zinc oxide, what we do best. We’re investing in infotainment, right? So information systems that go from the customer directly to the plant, and that’s what we’re still working on. So there’s a lot of money and a lot of time and a lot of resources. our CFO being a leader in the projects with our customer service out to the production floor to try and almost turn Zochem into like your local pizza place where when you know your orders in the oven if you will and we’d like to get that touch point with the customers but that takes money it takes time and it takes knowledge so we’re also investing in education right we can’t expect people to start using a system they weren’t comfortable with six months ago or a year ago so really that onboarding takes some uh further investment to make sure the computer system or the software or the hardware isn’t intimidating to our team members more than anything. 
Jill – Okay. 
Mo – Um and then lastly, you know, we always look at growth opportunities from the um M&A side. So, you know, we we do have a partner in Peru who we invested with uh about two to two and a half years ago and that was done to ensure that we can dip our toe in another pond. uh work with great people in a different continent with a great team and that’s really provided us a little bit more of a lens in terms of global shipments, global freight, you know, the global economy uh with us being a little more doicile than North America and them being a net exporter across the globe. 
Jill – So, we’re talking about building expansions and state-of-the-art controls. What does that actually look like here on the factory floor? 
Mo – You know what that looks like is basically kind of going from analog to digital if you will you know for the team members and you know we’ve been blessed with some team members who have been here almost 40 years um so we’ve got the skill we’ve got the knowledge and sometimes that becomes tribal knowledge so what we try and do with adding controls is making sure the machines are talking to them as much as they need to talk to the machines we don’t want it to become so artisan that only that 40-year experienced employee can run that because as valuable as a team member they are and how much they love us, they’re not going to be here with us forever, right? So, we uh what we try and do is turn it to more to touch points, right? And kind of if you think about old car to new car, right? You think about how they once looked, they work just fine for the time they were in. Now, we want to go and, you know, from the analog to digital so that, you know, we can when we’re problem solving, when we’re trying to go deep dive into an investigation, we can put more of a digital bullet on it than uh looking kind of from 30,000 ft always. 
Jill – So, how does this high-tech investment translate into consistent quality for the person at the end of the supply chain? 
Mo – So, for the end user, like for the for the our customer, I’ll start there. What they get is definitely a robust process. What the way Zochem provides their zinc oxide. So, we invest as you were asking before, where does the money go? We invest in larger muffle furnaces. The muff furnace is very different than what most of the world uses, which is more of a smaller teapot, aka a crucible.
Jill – Okay.
Mo – Now, what does that do for quality? like you asked. Basically, we have a larger molten metal bath. So, therefore, every time you’re adding this great zinc metal that you see around you, it’s not diluting your bath as much. The chemistry stays very consistent. The temperature controls are extremely consistent. So, you get a very continuous process that has a consistent vaporization rate. 
Jill – Okay? 
Mo – Now, with that vaporization rate, that’s part of the magic that makes the zinc oxide the customer is looking for, right? how we reacted with oxygen making zinc oxide together and then with the conveyance it’s essentially a big closed system. So there’s not as many touch points where an operator or someone even like me can manipulate the process, right? It’s it’s a little bit of a it is what it is but on purpose, right? So that you know the person putting the zinc in can almost point to the person who’s taking the zinc oxide out and everything else in between is strictly based on those affformentioned controls and uh machine and equipment that we put in place. 
Jill – So keeping everything consistent quality so you can guarantee that quality to your customers. 
Mo – Absolutely. Absolutely. We we want them to know that that bag before and that bag after is virtually the same. Right. Cuz the different end users we have whether it’s tires, agriculture, pharmaceuticals, paints and pigments. 
Jill – Yeah.
Mo – They all have a different need for that zinc oxide, but we just want to make sure that it’s still making the cake the way they want to make their cake, right? 
Jill – Exactly. Yes. Amazing. So, you talked about tires. We all fly down the highway of 70 mph, but we don’t often think about the actual tires. Why is zinc oxide considered such a critical ingredient for road safety?
Mo – You know, zinc oxide is among other constituents in a tire. So, uh, from what I’ve understood working with tire manufacturers, our customers, as well as like the US tire manufacturer association is, you know, zinc is really is pretty much a catalyst in terms of cross-linking other chemicals that they’re adding to the tires. So, you know, the the ability to actually heat up uh rubber with uh sulfur gets catalyzed and basically activated by zinc oxide. What does that mean? It just means that you get a consistent cross-linking of sulfur which gives you that network of consistent rubber bonds. 
Jill – Okay? 
Mo – You know that consistency in the bond will give you a very durable, reliable uh resilient tire, right? And the tire manufacturers in their responsible manufacturing, they have their secret sauce and can’t speak too much to that. It’s my knowledge isn’t there. But what I can tell you is that again kind of about making the cake. We would make four tires for a car identical, right? As much as they can from a repeatable reproducible method. So that’s upon us to give them a consistent homogeneous product that’s uniform in particle size that has uniform impurities and that again when they get one lot uh which is let’s say a truckload and then a day later they get another truckload, we want them to feel like they just got the same product. you know it there’s no separation there’s no bag to bag differences and that really I think you know going to the importance is uh how it cross links the sulfur molecules we provide that consistent activation right versus if you could there is zinc oxide out there that’s not homogeneous that’s a bit of a mix of two materials there could be inconsistencies badge to badge there could be and how that affects the tire manufacturer that I can’t speak to but what I can say is I know with ours they have a robust product so 
Jill – Some people have raised concerns about zinc and tires. Does that pressure make you nervous about the millions you’re investing or does it give you more confidence? 
Mo – You know that that’s a you know environmental aspect that has shown up uh over the past decade or so and uh it does not make me nervous but you know I can see why the question is quite applicable. um why it doesn’t is having spoken with executives at tire manufacturers, having spoken again with the US Tire Manufacturer Association here more locally in North America, what I’ve understood is zinc is essential in tires. Now again, what we can do is provide a consistent product that provides them the consistent tire so that whether it’s the rubber degradation that’s got people a little bit excited about the zinc that’s in tires that ends up in rubble that ends up in your water stream, right? That’s something that, you know, can be somewhat controlled. Yeah. Uh that’s what tire technology comes down to in terms of probably trying to minimize some of that tire rubble that shows up on the road. And then when it comes to people like us at Zochem, whether it’s in Ontario, Canada or Tennessee, USA, what we do is we use fairly pure product. And even if we use recyclable reusable products, thanks to those muff furnaces I described, you get a consistent output with low impurities. 
Jill – Right?
Mo – So therefore, the rubber that is degradated would have the lowest available impurities thanks to the process we provide, right? You know, and again, that’s our input into that as a constituent of the tire, right? So, we’re not nervous. Um, you know, it’s essential for the tire production. Um, and so we just want to be a responsible actor within that supply food chain, if you will. So, when it comes to a GMP facility, for the non-experts, why should a tire maker care if their zinc is produced in a pharmaceutical grade environment? You know, it’s one of those things. Um, you’re getting it whether you asked for it or not. 
Jill – Okay? 
Mo – So, you know, I’m full of analogies here, but I’m thinking, you know, if you were always getting an organic apple or you were always getting grass-fed beef, um, whether you asked for it or not, you’re getting it. That’s something that you would say okay I’m getting value and whether I’m paying for those certifications per se. So when we’re FDA or Health Canada or ICHQ7A certified, it is for the active ingredient USP material we call it US Pharmacopia, they’re the people who need that. Those users, whether it’s sunscreen, multivitamins, baby’s diaper rash cream, uh some medicinal applications, those are things that I would tell you are applicable and and would want and desire GMP. The tire manufacturer, what they get is all the controls that goes into that. So, you’ve got the documentation, right? You’ve got the the recordkeeping, you’ve got the training, you’ve got the reliability in the workforce that’s making a product that’s that well controlled. So, when you’re that well controlled, you know, you’re getting again that repeatable product, right? And and to be honest, when it comes to pharmaceutical grade, which we’re darn proud of, it is the recordeping to know we did exactly what we’re supposed to do that keeps us defensible, right? Like the pen is like your liquid sword, right? That’s what’s gonna you’re gonna pull out and say, “I did it right.” 
Jill – Right
Mo – And the tire maker as well as the sunscreen maker will both benefit from that. 
Jill – So, you called it a catalyst. How does Zochem’s specific French process help a customer’s plant run more efficiently? Is it just about the speed? 
Mo – It’s not just about the speed. There’s different types of zinc oxide. So, making a French process zinc oxide that would, you know, when you talk about speed, yeah, um another zinc oxide will also catalyze. It will work in the same way to cross-link the sulfur molecules to make a network of rubber um for hopefully a venerable tire. The consistency that we bring for speed is that French process zinc oxide is the most pure. So we have a little more free zinc ions available. So if you throw ours in a batch and you throw an alternative type in a batch, the French process is going to have a few more available zinc ions, which is going to allow you to react a little bit more. So you may cure a little quicker than using the alternative. So when you’re thinking of any manufacturing plant, let’s we could start with tires, we could go to agriculture applications, uh we could go to some specialty chemicals like motor oil additives. If you can do something in a cycle time that’s even 2% less or 1% less, you can make that much more material over a day, a week, a month, a year, right? That’s great amount of savings for efficiency, right? That’s that’s improves your output. you know, it improves your uh output per person, your revenue per person. Um, and it just allows that the efficiency of that team member at our customer to be that more value added, right? So, it’s it’s a little bit about it’s more about that. It’s more about the the availability of the zinc and us knowing again that the higher amount of zinc ions available are definitely higher in French processed zinc oxide versus an alternative. 
Jill – Right. Amazing. So, if it isn’t broken, why fix it? Why not just run older furnaces like many other manufacturing companies do? 
Mo – You know, we could we could, and I’m going to say the word, we could get away with it. We could because we have put a high level of capex even in our existing previously made furnaces. Uh, and just to give you kind of a dollar amount, one of our furnaces, uh, with all their auxiliary equipment would probably be at least 5 to 6 million US. Um the alternatives type is is less than a million if you will or maybe a million. And so why we do that is so we have a a apparatus and a piece of equipment that’s going to remain. It’s going to stay. It’s going to be there for the team member for the team member to know that when they walk in each day, it being a continuous process um 365 days a year, they know that they’re going to come into a fairly repeatable process primarily from a safety standpoint. I say that. Yeah. Um, so your question being in terms of why not just run the old ones, it comes back a little bit to that analog digital, right? The comparison I gave, it comes a little bit to the fact that we want to make sure that we’re up to speed on the most the best available technology and it’s more about information more than anything. The what I would close with is we also have been working to be a more responsible and improved user of reusable and recyclable materials and those have a little different nuance to them. So we’ve also been changing the design a little bit as we iterate furnace to furnace. You know we made one in 2021 it wasn’t the same as the previous one and the one we started in 2024 wasn’t the same as the one in 2021.They’re very similar. You know, they look like a very similar shell, but the insides have been changed to be more to provide a safer, more quality consistent operation. Okay. And mainly again for the team member because the team member gets that, it translates for the customer. 
Jill – Yeah. Yeah, for sure. I think that’s super important to obviously have a safe environment for your workers, but also for your output, too. If it’s um dependable and what’s that word? 
Mo – Yeah, that reliable. 
Jill – Reliable. Yeah, absolutely. Predictable um to know when you’re going to be doing maintenance. then you can keep your output going up until that point. 
Mo – No, it’s a it’s it’s a really good comment because you know when any manufacturing business and anyone in manufacturing, they will tell you is that there is a harmony needed between a commercial sales team and the manufacturing team, right? And what these furnaces and the way Zochem invests, what it allows to do, it allows to provide that predictability to the commercial team. And if the commercial team has to zigg instead of zag, the manufacturing team can also look at what their ability is to do that based on what’s running, how much of the capacity is mobilized, and what their what the different levers are that they can pull on. So, it really does help versus being more in a knee-jerk reaction mode um or trying to speed up a line that isn’t really available to speed up, right? Create it creates a lot of stress, creates quality concerns. you usually have more offspec material stuff that you can’t ship. Um, and that’s the kind of uh that’s the kind of end result we’re not looking for.