Globalization, digitalization, environmental sustainability, and the plastics waste challenge will transform how industry operates, LyondellBasell chairman and CEO Bob Patel told attendees in the keynote address today at the Gulf Petrochemicals and Chemicals Association (GPCA) annual forum in Dubai.
The forces will “transform the way we think, the way we operate, and engage in the decades to come in today’s increasingly interconnected world,” Patel says. “We need to think in a matrix way, not just about the market opportunities in front of us, but about the broader forces influencing our success, failure, or ability to compete.”
Globalization has been a strong positive for industry and people around the world but presents risks, Patel says. “As our world and industry become more interconnected, we have an increasing level of exposure to disruption caused by events well beyond our control,” Patel says. “We need to consider additional factors such as increases in protectionism and its implications for global trade,” Patel says. Factors such as potential for global recession and impacts of geopolitical tensions also need to be accounted for. “All of these examples are well beyond our control, but nonetheless represent real events and movements we need to consider as we build partnerships and resilience [in] our business models,” Patel says.
Digitization, meanwhile, has the potential to impact value chains, improve productivity, and create new channels to market, Patel says. Digitalization should be embraced by industry as an opportunity for significant value creation through more informed decision making, he says. “We have the opportunity to take unstructured information and leverage it in a manner that delivers higher throughput, lower energy consumption, more effective maintenance, and even improvements in safety,” Patel says. Digitalization will touch on core operations across R&D, plant operations, supply chain, a more connected workforce, and the customer experience, he adds.
Environmental sustainability will also have an increasing impact on how industry operates. “There is growing attention being paid to the environmental footprint of our manufacturing sites and supply chains,” Patel says. Industry has responded through efforts such as the Cracker of the Future consortium, which will explore how to reduce emissions by heating cracking furnaces with electricity instead of fossil fuels. Other efforts targeting CO2 reduction and more efficient water use are under way. “Clearly, there’s no one answer here but the drive to reduce water usage and carbon emissions will continue to be a focus and continue to be a force that affects our industry for decades to come,” Patel says.
Challenges related to plastic waste will also have a massive impact. “This trend has seen the most attention in Europe, but we know that it will undoubtedly become global over time,” Patel says. “Governments are becoming increasingly focused on the concept of circularity and I believe we are at the beginning of what will become a much more complex and compulsory regulatory environment.”
Expansion of recycled material use could equate to a roughly 50% reduction in the demand growth for virgin material under more aggressive planning scenarios, Patel notes. “We have started to think about this trend and how it actually presents a business opportunity.” LyondellBasell’s initial efforts in the area include the investment in Quality Circular Polymers, a polymer recycling joint venture with Suez. “The circular economy is challenging all of us to think about our business differently and about how to create new complementary business models and partnerships,” Patel says.
Going forward, the formula for success in the industry will not be determined just by feedstock advantage, high operating rates, and low cost, Patel stresses. Those factors must be coupled with successful innovation and broad stakeholder engagement. Game-changing innovations such as chemical recycling and crude-to-chemical technologies are emerging. “And we also need better engagement with our employees, communities, and government to ensure that the value of our products is clearly understood. Everyone needs to know that we are committed to a solution and not simply trying to hold off increased regulation,” Patel says.
The formation of Alliance to End Plastic Waste, with more than 50 industry and supply chain partners, earlier this year is one demonstration of successful engagement. “We’re taking practical steps to identify solutions for effective, scalable, and replicable waste solutions,” Patel says.
“There are a lot of questions and some degrees of uncertainty and I’m certain that I don’t have all the answers, but I believe if we do the right things, make sound decisions, and collaborate on practical market-based solutions, we can make this challenge a win, win, win for our industry, the environment, and consumers around the world.”
By Robert Westervelt
Source: Chemical Week
Sika AG (Baar, Switzerland) has opened a new plant in Santa Cruz de la Sierra, thus doubling its production capacity for mortar and concrete admixtures in Bolivia. With this new facility in one of the country’s main industrial agglomerations, Sika is positioning itself for continued growth in the dynamic Bolivian construction market.
Chevron Corporation (NYSE: CVX) and Renewable Energy Group, Inc. (NASDAQ: REGI) (REG) announced on Monday a definitive agreement under which Chevron will acquire the outstanding shares of REG in an all-cash transaction valued at $3.15 billion, or $61.50 per share.
Lotte Chemical Corp. will invest 10 trillion won ($8 billion) on hydrogen and battery materials through 2030 to achieve annual revenue of 50 trillion won and carbon neutrality. The Korean chemical producer on Thursday unveiled its new corporate vision outlining key corporate strategies with focus on growth through hydrogen energy and battery materials businesses.