NiTech Solutions Wins ICIS Innovation Award

NiTech Solutions has won the prestigious ICIS Innovation award in the SME (Small/Medium size Enterprise) category.

As some may know, I do have a particular interest here - in my role as the Engineering Director with NiTech Solutions.

This award is fantastic news for an SME which is looking to make a breakthrough in the equipment market.


The picture shows the plant that won the award - installed with Genzyme, the leading biotech company. This technology essentially replaces a standard stirred-tank batch reactor and offers a major cost reduction - in both capital and operating costs, as well as better product quality, lower carbon footprint and waste reduction.

The technology is applicable to a wide range of applications, such as crystallisation, biodiesel, hydrogenation, polymerisation and pharmaceutical API's.

The mixing in the NiTech Continuously Oscillatory Baffled Reactor (COBR) is much more efficient than the mixing in a standard CSTR. The mixing, combined with high surface area per unit volume, means that steam and cooling water usage is much reduced. Furthermore conditions very near to plug flow can be attained at relatively low flow rates resulting in consistent product quality and yield.

Very much one of the 'green technologies' we hear so much about!

Typhoon Leads to Petrochemicals Shutdowns in Taiwan

photo : http://www.cdn.wn.com/

Chemicals manufacturers are very familiar with the need for comprehensive risk assessments and the implementation of appropriate mitigation measures. However, some events are beyond the wildest imagination of most manufacturers.

Producers in Taiwan have been forced to shutdown petrochemical facilities in Kaohsiung in southern Taiwan because of flooding caused by Typhoon Fanapi.

A report in John Richardson's 'Asian Chemical Connections Blog', published by ICIS, indicates that the flood waters reached a height of more than 100 centimetres in the petrochemical parks.

No doubt the plants will restart swiftly once the waters have receded but one can imagine significant damage to equipment (IP65 is a standard for most instrumentation but only gives protection against water spray and not total immersion) as well as the awful mess that will have to be cleared before things can return to normal.

ICIS Publishes Top 100 Companies For 2009

ICIS has recently published its regular Top 100 Chemical Companies feature, together with an excellent analysis of the events of the last year.

The Top 5, ranked in terms of sales, are BASF, Dow Chemical, ExxonMobil, Sinopec and Lyondell Basell. Of these, Sinopec is new to the top 5, having been ranked 8th last year.

Looking back over the last year, it is really quite remarkable that the major chemical companies have fared so well in adapting to an economic crisis that saw an oil price crash from a peak of $147 per barrel down to $32 per barrel and a virtual collapse in markets such as construction and automotive.

Clearly survival required significant cost reduction across the board. Reduced working capital, operating and maintenance cost reductions and reduced capital expenditure were commonplace, the only difference being the depth of cuts from one company to the next.

This blog has talked much about a new normal in the post recession period. The challenge remains a difficult one for all chemicals producers as we move forward. It will be necessary to deal with the economic conditions that this new normal will bring, whilst also adopting strategies to address the impacts of the recent cost cuts in areas such as capital expenditure.

However, in having survived so far, companies have clearly demonstrated that they have the management capabilities and willingness to adapt.

Chemical Industry Strategies For The Coming Decade

The start of a new year is a good time to think about Chemical industry strategies for the new decade. Just a very quick look back at the 'noughties' will tell us that we are set for a decade of significant upheaval for the industry.

The last decade saw huge changes in the chemical industry. Several years of strong growth followed by a very painful recession. The emergence of new players in the industry and a steady shift of the manufacturing base from Europe and North America to the Middle East and Asia.

In thinking about what is to come, I'd like to highlight two excellent articles published in ICIS Chemical  Business

In his article 'Prepare for the Great Petchem Marathon', Paul Hodges focuses on the key issues that need to be tackled. Restructuring, Supply Chain, Technology, Commercial Strategies and Size and Scale are flagged as key issues for chemical companies. Paul suggests that the motto for the new decade could be 'Think About Tomorrow and Act Today'

In another excellent article 'Recession Prompts Shift in Chemical Strategies', Anna Jagger focuses on the societal 'Megatrends' that will provide major opportunities for flexible and innovative chemical companies. The article lists Renewables, Food, Energy Efficiency and Water as being key issues for the coming decade.

The new decade will bring significant change. There will be significant problems to deal with, there will be threats to the industry but there will also be major new opportunities. Excellent strategic planning, in-built flexibility and the ability and desire to innovate will be the key attributes of successful companies.

Weekly News Round Up

This week's round-up of news and updates on previous stories

• Speculation over the future of LyondellBasell continues. Following the reported $10-12 billion offer from Reliance Industries, a spokesperson for Sinopec has denied that they were considering a joint bid with equity firm TPG.

• Speaking at the Indian Petrochem 2009 Conference in Mumbia. Roland Walzi of Linde talked of the difficulties of 'mega cracker' projects. Mr Walzi exppressed his view that ethylene plants of greater than 2million tonnes/year capacity were unlikely due to 'technical challenges and economies of scale'.

• An investigation has started into two explosions at the SNF Group's factory, located in Andrézieux in France. Four people were injured in the incidents, two seriously, believed to be caused by the mixing of incompatible substances. The incident is believed to be due to human error.

• Moody's Investors Services has updated its outlook for the chemical industry. The view is pessimistic, given limited volume growth, overcapacity and concerns over rising raw materials prices.

• The Qatar-based Qatofin, a joint venture between Total and QAPCO, has inaugurated a new 450 kT LLDPE plant in Mesaieed. Commercial production is expected in January next year.

• ICIS has updated its estimate of the total number of job losses in the chemical industry since the start of the financial crisis. ICIS now estimates that more than 83,000 jobs have been lost so far.

Friday News Round Up

Today's round-up of news and updates on previous stories

• Total has today pleaded guilty to charges relating to the explosion at the Buncefield oil depot in Hertfordshire in 2005. A subtantial fine is likely but this will not be set until trials have been held for the other companies charged in relation to the incident. Earlier this year, the court ruled that Total should pay the property damage bills of individual and business claimants, amounting to £750m - an appeal against this decision wil be held next year.

• NOVA Chemicals annouced details of its new board of directors. As expected, the new board will have significantly increased involvement by both the group's owner IPIC and Borealis

• Dow Chemical has said that it plans to sell more assets in 2010 as it continues to work toward paying off debt from its $16.5 billion acquisition of Rohm and Haas in April. The sale will include the Styron business - the deal is expected to close in early 2010 - together with a number of smaller businesses.

• In an interview with ICIS, Peter Young of the US Investment Bank Young and Partners expressed his view that M&A activity in the chemical industry would increase meaningfully in 2010.

• SABIC came at the top of a list the largest 100 publicly traded GCC companies in terms of market value at $ 64 billion

Continuity Meets Flexibility

In my recent post New Reality for Petchems, I discussed the manufacturing implications of a slow recovery from recession punctuated by periods of volatility (based on the article published in the Chemicals and The Economy blog). Given my conclusions from this post, regarding the need to manage costs whilst retaining flexibility, I was very interested to learn LANXESS has won the ICIS company of the year award for its business performance and the fact that it is so well positioned to manage the upturn. According to LANXESS CEO Axel C. Heitmann: “The results in the first nine months of 2008 highlighted that LANXESS was pursuing the right strategy of profitable growth. Then in the fourth quarter came an economic downturn of historic proportions. Our restructuring skills were called upon again and we reacted swiftly with a package of measures. I am confident that LANXESS will emerge strengthened from the crisis.” The phrase 'Continuity Meets Flexibility' was the strapline for the 2008 annual report which can be found here. In recent months, LANXESS has agreed a number of recession related measures with its workforce. Some of these were tough (but necessary) such as remuneration decreases for all management employees. Other measures focussed on flexibility and the need to have the ability to manage the effects of the downturn. In particular, the agreed package 'Challenge12' defines how the company will flexibly use its assets, recognising the fact that demand may fall when government stimulus packages come to an end. This flexibility is being delivered via a number of mechanisms such as bringing forward scheduled maintenance shutdowns, reducing overtime credit balances, bringing forward non-working shifts, shutdowns for vacation periods, flexible working shifts, temporary closure of production lines and temporary closure of entire plants. Simple but highly effective. The fact that LANXESS has identified and agreed, in advance, the measures that it can use to achieve flexibility, means that it will be very well placed to deal with whatever the recovery throws at it.

ICIS Top 100 Chemical Companies

My recent post on the ICIS Top 100 Chemical Companies generated much discussion.

Many thanks to Lara McNamee of ICIS who posted the link to the PDF file in the comments section of the blog.

The PDF file can be downloaded by following this link

It will be very interesting to see the 2009 top 100 report and assess the growth of the Middle Eastern chemical companies as well as the impact of recession on the major European and North American chemical companies.

New Reality For Petchems

In the Chemicals and the Economy blog and an article for ICIS Chemical Business, my colleague Paul Hodges shares his view that the landscape for Petrochemicals has changed during the current downturn. As Paul states 'We came into the downturn on the back of a major boom in consumption, supported by reckless lending and borrowing and now this mind-set seems unlikely to return quickly'. If this view is correct, we are in for a sustained period of lower volumes and reduced margins but punctuated by periods of high volatility caused by oil and currency markets. This will certainly mean that the pressure that has been experienced by the manufacturing sites during the downturn will continue. As consumers in the market place shift from "wants" to "needs", exactly the same shift will apply to chemical manufacturing site managers. To make things even harder, however, managers will need to be able to cope with the consequences of market volatility. There must be a clear focus on what needs to be done to survive but this absolutely must not affect the ability to be flexible . A focus on cost effectiveness and value for money is essential. Wastes of all types must be identified and systematically eliminated using approaches such as Lean Manufacturing. Value chains within the manufacturing plant and supply chain must be shortened wherever possible using value stream mapping techniques. Organisational effectiveness is a must. Staffing levels must be reviewed critically to ensure that organisations are as effective as possible and staff should be trained and ready to play their part by being able to safely and effectively start-up, shut-down, change grade and increase production rates at very short notice. This means that simply cutting numbers is not smart enough - skills must be retained.

In short, highest quality manufacturing management will be absolutely essential if sites are to survive and thrive in the new landscape.

Top 10 Chemical Companies in 2008 and in 1998

ICIS has recently published its fascinating analysis of the top 100 chemical companies in 2008 (ranked by sales). The names in the list will not be a surprise to many; BASF, ExxonMobil, Dow Chemical, LyondellBasell, Du Pont and Shell figure prominently in the list.

What is more interesting is to look back to the top 10 in 1998 and look at the differences. BASF, Dow and Du Pont were all present but other names have disappeared completely; ICI, Hoechst and Rhone Poulenc were very big 1998.

New additions to the top 10 are the likes of SABIC, Sinopec, LyondellBasell and Ineos, with SABIC and Sinopec growing very quickly in recent years. LyondellBasell and Ineos are, of course, new companies formed in recent years and which have grown through successions of acquisitions.

The brave amongst us might like to try and predict what 2018 might look like. New names like Borouge and ChemaWEyaat may well appear, with some European and North American companies coming under some pressure?