'The intent was to protect the team members and their families': Braskem America CEO addresses staff living in their factories to produce PPE materials

Braskem America's employees have volunteered to live in the company’s chemical plant facilities to help produce more PPE materials. Braskem America CEO Mark Nikolich joins Yahoo Finance’s On The Move to discuss.

Video Transcript

ADAM SHAPIRO: And welcome back to Yahoo Finance. We're watching a rally on Wall Street. The Dow is up over 290 points, S&P 500 up about 40 points. NASDAQ is up over 100 points. Oil is trading down. It's off about 25%. When they write the history of the COVID-19 crisis, one of the stories they must include are the heroic efforts by men and women from Braskem America who slept in their factory for 28 days in order to produce necessary components that help build and make the protective gear that doctors and nurses and so many people need to fight COVID-19. The CEO of Braskem America, Mark Nikolich, joins us now to talk about that. And thank you, first, for what your staff has done. But I need you to explain to us, what is a polyolefin? And how was it a key component to this stuff?

MARK NIKOLICH: Sure. So just in general, first of all, I appreciate the opportunity and appreciate the opportunity to recognize the team. We make polypropylene-- in this case in the US. And polypropylene is a polymer that's then made into fibers-- in this case, non-woven fibers that are made into a fabric that end up in personal protective equipment like facemasks and medical gowns and hygiene products and disinfectant wipes. So a polyolefin is a general categorization-- it's polypropylene that we're manufacturing at our plants in the US.

JULIA LA ROCHE: Hi, Mark. It's Julia La Roche. And the story-- 28 days living with all of your colleagues in the factory, can you just talk to us about the logistics of that-- not just the work aspect of it, but also the work-life balance within the factory. I imagine there-- probably had to keep people entertained off of work, but also cooking, cleaning-- take us inside that process.

MARK NIKOLICH: Sure. Well, a couple of things-- first of all, we had two plants that volunteered and instituted through dialogue between the leaders and the team members there-- their own live-ins. And again, the intent was primarily to protect the team members and their family-- in other words, secure the health and safety of the team members and their families and their loved ones that they're going home to every night. And then secondarily, to continue to support the supply chain that leads to this protective equipment that can help us combat COVID-19. So those were the two primaries.

But a live-in of this type is very unusual, and we really, again-- I have to emphasize, we left it to the delegation and teams-- the sites chose to do this on a voluntary basis. And then we chose to support, right? And the support came in the form of just providing facilities. And you can only do this in sites that have the space to do this. But we obviously provided air beds, air mattresses, we provided all kinds of, I'll say, living quarters that are in an office space in the plant. It's a very unique living environment.

We had to increase the capabilities of the Wi-Fi, as you can well imagine. Because on off hours, movies, Xbox, you know, video chats, Zooms with their families and loved ones was really important. And then it was a mix of food. We have facilities on these sites. They have locker rooms. They have kitchens where they can cook. So in some cases, they cooked where they have team members that have the ability to do that. In other cases, we delivered premade food-- you know, pre-cooked and packaged food for them to consume.

So it was a massive effort, but the credit really goes to the team members. We had over 80 team members between West Virginia and Pennsylvania that lived-in. West Virginia's still in there living in until next Tuesday. And it really is a credit to those guys for spending 28 straight days on-site, right? They're 12-hour shift on, 12 hours off. So it's tough. It's tough.

ADAM SHAPIRO: I think all of us understand the pride you must feel for your team. We can see it in your face, and it's truly earned. But what are you seeing as we go forward? I can't imagine the demand is slacking off for the product to supply.

MARK NIKOLICH: Sure. Well, we've seen about a 40% increase in demand in polymer, specifically for these applications-- medical and hygiene. So it's been a pretty extreme increase in demand, of course, relative to other demand that is challenged-- certainly in the durables area. So accommodating our plants, shifting line time around to be able to make the right product for non-wovens-- for hygiene and medical-- was really important.

But you can only do this, to your point, for a period of time, and then we worry about fatigue. We're running a hydrocarbon process, so process safety and safety of the individuals, in addition to COVID, is extremely important. And so we had to bring this to an end at a certain point. But what it allowed us to do was secure the team and the supply chain for a period of time. The Marcus Hook team, the Pennsylvania team, has already migrated back to a seven-day on, seven-day off shift-- a modified shift schedule that's different than the live-in. And our Neal, West Virginia team will move to that come Tuesday when they finish their live-in, We actually talked to the team yesterday afternoon, and they're doing great. But they're also looking forward to getting home to their families on Tuesday.

JULIA LA ROCHE: Hey, Mark, it's Julia again. We've had of Mark Cuban on this show a couple of times in recent weeks, and in our conversations with him, we've talked about infrastructure and manufacturing. And I'm just wondering-- given your perspective, how important is domestic manufacturing? And do you think that importance is going to be realized even more so as we come through the end of this crisis?

MARK NIKOLICH: Sure. It's a great question. I mean, we've seen through the trade disputes an increased on-shoring, right-- a re-shoring, if you will, of manufacturing-- certainly for the conversion of polymers and plastics into essential items. And I expect that to continue afterwards. You know, we have-- we have very competitive hydrocarbon bases in the US with shale. And while energy is under pressure today, the derivatives and the products that we make are important. And the US is globally competitive.

So I expect that to rebound. But again, it's going to be very dependent on the dialogues that have occurred earlier in this show around reopening and economic growth. We need economic growth. We need spending to consume to keep the economic engine going. And so you know, when I talk about our plants, we talk about safety of the people, we talk about securing the supply chain, the third thing we talk about is the economic engine and how do we keep people employed-- and the secondary and tertiary businesses around our plants that keep communities running. So I think that's a critical aspect of it. And I do think after this crisis, we'll have, I'll say, a bigger base and more drive to manufacture in the US than we've had over the past few years.

RICK NEWMAN: Hey, Mark, Rick Newman here. I'm sure people would love to know-- what did the workers get out of this? How did you reward them for living in a factory for a month?

MARK NIKOLICH: Well, you know, in an industrial business like this, we deal with hurricanes, we deal with strikes, we deal with other kind of crises, but this is totally unprecedented, right? And so we really challenged the industrial teams to come up with their own proactive measures. And to their credit, they decided to act very early, and I'll say with conviction-- and pretty severely, right, that these live-ins. In support of that, we're paying-- we pay for, I'll say, hazard duty, right? And so they're getting paid in the asset, and they're getting paid not just for the 12-hour shift they're on, but they're getting paid for the entire time they're in the asset. And they deserve that, right?

And West Virginia was kind of interesting-- we had numerous-- we had more team members volunteer than we could have on the live-in crew. And it was really interesting, because the live-in crew was reaching out to the team members that couldn't participate, even though they volunteered. And one of the things that was important to them is that we're paying the team members that can't participate in the plant. So those, we're paying on a 40-hour work week, again, to try to support the economic aspect of this.

So they're getting some extra pay out of it. But I think what's most important is they volunteered and their commitment and dedication, not just to the asset, but to helping solve the portion of the crisis that we can help solve I think was the real driver.

ADAM SHAPIRO: OK, Mark Nikolich-- I think a grateful country, and 330 million of us are grateful for what the small workforce at Braskem America has done and continues to do. Thank you for joining us-- the CEO from Braskem America here on Yahoo Finance.

MARK NIKOLICH: Thank you all. And thanks for recognizing the team.