REACH Costs to Spiral?

A very interesting article from RSC discusses concerns expressed by two senior US based toxicologists regarding the potential costs and the likely animal testing requirements resulting from the 'authorisation' stage of the REACH legislation. The issue arises as the number of substances pre-registered for the EU's REACH chemicals legislation hugely exceeded expectations. There were 2.7 million pre-registrations for more than 140,000 substances, instead of the predicted 180,000 registrations for 29,000 substances. The original estimates led to a predicted testing cost of €1.6BN for industry to achieve authorisation but this is now expected to be much higher, with suggestions that the total bill could approach €10BN and that the requirements could possibly exceed the current capacities of the testing laboratories. The decisions on which chemicals must be tested must be made by December 2010. Already, the ECHA has been looking at ways of reducing the testing burden but there is still much work to be done in order to avoid a major bottleneck and a significant increase in animal testing. REACH has already been causing significant headaches for chemical companies, with the issues related to the coordination of the substance information exchange forums (SIEFs). It very much looks like there are yet more challenges to come as we move beyond the SIEFS and into evaluation and authoristion.

Where Next For European Petrochemical Manufacturers?

photo: arabianoilandgas.com

Times have been tough lately for European petrochemical producers. With demand depressed since the second half of 2008, margins have been squeezed and profitability has been severely impacted.

This is further compounded by the tidal wave of new capacity coming on stream in the next few years. A number of huge petrochemical complexes are now commissioned and many more will start-up between now and 2012.

For the manufacturers this translates into significantly reduced operating rates, demands to cut costs and a highly concerned workforce, worried about future job security.

This is not an easy set of factors to manage. Strong leadership is absolutely essential. Costs must be cut but without significantly increasing the levels of risk - effective management of change is a must. There must be an absolute focus on 'doing the right things' and eliminating all types of waste throughout the entire supply chain and in all of the service functions. Good people management means communication (and more communication), empathy and a very clear sense of direction.

Even with all of this, there will be casualties. More plants will have to close down in order to restore the supply/demand balance and as I've noted previously, this is a process which needs strong project management in order to achieve best results.

It is a very tough and sometimes lonely time for manufacturing managers. Most important is to take control - identify strategies for dealing with all of the issues and keep looking at the horizon. In this way you'll be best prepared for whatever is coming.

Process Safety - You Don't Improve What You Don't Measure

I've been in Kuala Lumpur delivering training to industry professionals this week. Due to the nature of the course, we discussed Texas City, Bhopal and Piper Alpha as relevant case studies highlighting just what can go wrong. It is now almost 25 years since the Bhopal catastrophe and thankfully the industry has made significant steps forward in reducing the likelihood of such incidents happening in future. However, I'm sure that we all can agree that we need to keep on pushing for improvement in this respect and that complacency in PSM is absolutely not an option.

We all know what can happen when process safety is not managed adequately; Texas City, Flixborough, Seveso, Bhopal, Piper Alpha amongst many, many others. These incidents have enormous impacts; for the people killed, hurt or otherwise affected by the incidents and for the organisations involved - in terms of cost, reputation and business continuity.

Yet many organisations that want to improve process safety still struggle with defining the right metrics, particularly in the case of leading indicators.

From a number of discussions with experts in this field, it is clear that there are sometimes differing views on exactly what should be measured and there is acceptance that, in some cases, the measures need to be site and process specific. One thing which is universally agreed, however, is that leading indicators are highly valuable to give an early warning that things could go wrong.

For those new to this subject, the guide from Center for Chemical Process Safety, 'Process Safety - You Don't Improve What You Don't Measure' , is an excellent starting point. Click here for link

10,000 Jobs at Risk in UK Chemical Industry

It has always been relatively difficult for the Chemical Industry to make itself heard in the UK, compared to, say, the automotive industry. A KPMG analyst, Chris Stirling has warned that the UK's chemicals industry was being left to "suffer in silence" whilst efforts were being focused on other industries. It is claimed that recent closure announcements put as many as 10,000 jobs at risk across the UK, either directly or in supply firms. "The chemicals industry simply cannot be left to suffer in silence. The industry needs to better promote itself to the Government, presenting the case for why it is imperative to have a guaranteed supply of certain strategic chemicals in the UK, not just in terms of our own industrial output, to which the chemical industry contributes more than £5 billion annually to the UK balance of trade, but also in terms of long-term job and wealth creation" he said. This blog endorses the view. The UK Chemical Industries Asociation, together with UK regional groups such as NEPIC are doing what they can but need the support of others within the chemical industry to make themselves heard!