INEOS Capital

Sustainability runs through the very heart of the way INEOS operates around the world. But how does the company approach this much talked about subject? To find out, Tom Crotty met Jim Dawson, a nonexecutive director of INEOS, the chairman of INEOS Technologies, Oxide and Bio and someone with vast experience of the petrochemicals industry.

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INEOS CAPITAL INTERVIEW

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Tom: Many companies have invested in sustainability departments but INEOS hasn’t. Doesn’t INEOS view sustainability as important enough to warrant its own department?

Jim: Quite the contrary. Sustainability is important to INEOS. It is a feature of all of our activities. We are not the sort of company that has a big central office that says ‘Sustainability’. We expect every business and everybody in it to follow that approach as part of its day-to-day business.

I can remember when – because I am old – some 40 years ago the price of oil was $2 (about $10 in today’s terms) and energy was cheap.

Today, and for the past couple of years, it has been about $110 globally and therefore there is a big pressure to improve energy consumption and also to produce products that save energy, so a good example of this is where we improve the operation and efficiency of our plants. We invest in better heat exchangers. We improve our reliability and reduce flaring. We improve our furnaces to be more efficient. As a result our energy consumption drops quite a bit. And the products we produce also provide significant benefit to society. Products such as expanded polystyrene for example. We have a special version called EPS Silver that is used to insulate buildings. It is a special form of EPS that can improve energy efficiency by 20% compared with the standard product. That’s just one example of producing products that are good for sustainable development. On average, across chemical products, for every kilogram of carbon emitted in their production, two kilograms of carbon are saved in their use.

Tom: INEOS often talks about the importance of being a good neighbour. Why is that so important to the sustainability of the business?

Jim: It is important in many ways. We have to maintain trust and have a good relationship with our neighbouring communities. One reason, of course, is that we employ quite a lot of people, at our sites, who live in the neighbouring communities. It is very important to be transparent about what is going on our sites. A good example is on safety and environment. Both are very import to us. If we get that right, our communities know we are doing the right thing. We take Safety Health and Environmental performance very seriously at the highest level. We have 15 businesses and we have board meetings every month or two.

At the start of every meeting we have a session on personal safety, on process safety and environmental impact. And I am pleased to say that last year our personal safety records was one of the best ever in INEOS history and the environmental impact record was one of the best in INEOS history, so I think we are doing good things for the community and ourselves by working on that. We also have community meetings at many sites so that people are totally aware what’s going on in their neighbouring plant.

Tom: Another important aspect of sustainability is attracting and retaining the right people. How is INEOS investing in training and developing the best workforce?

Jim: Ours is a technically demanding business and there is plenty of competition so we need to make sure we attract and retain the right people, and that is at all levels in the organisation. It may be apprenticeships where we are trying to improve operations on our plants and provide opportunities for further progression. Or it may be graduate programmes where we are trying to get other training for those people so that they can diversify their career, get opportunities in different businesses and progress through the company. Because of that, we do a lot of work with various institutions, with schools, with technical colleges and universities to try to identify and attract those best people, that will one day be the leaders of our businesses.

Tom: Jim, we have talked a lot about the culture of the business. And the culture within INEOS seems to encourage the development of an entrepreneurial spirit. Why is that?

Jim: INEOS has its own style. It is focused. It focuses on profit. It focuses on safety and it wants an entrepreneurial, “can-do” style. And we need that because the chemical industry is complex and competitive.

Chemicals are used in transport, in medicine, in communications, in buildings, in a whole raft of important markets and we need an entrepreneurial spirit to make the best of those. And there are some good examples. Liquid food packaging is important to all of us. We can make the central barriers 35% thinner by using a different catalyst in the polyethylene that forms them. We also do simple things like using a different form of high density polyethylene to reduce the weight of bottle tops. It is a trivial thing but when you think of the billions of bottles that are produced and the contents consumed, then small amounts of change like that make a big difference. Another example of entrepreneurial thinking is in our bio-fuels. We have developed a process to convert organic waste into bio-ethanol, and that organic waste can be municipal solid waste. It is then gasified into syngas, which is carbon monoxide and hydrogen. That then reacts with micro-organisms and they convert it into ethanol. We have constructed an eight million gallon, commercial scale plant in Florida. It is mechanically complete. It is the first plant in the world. It is new technology so we are going through a quite time consuming mechanism of starting the plant up. Dealing with solids at the front end or liquids in the middle takes time to optimise. When completed we will be producing bio-ethanol on a commercial scale that goes into the nation’s fuel supply. And that’s certainly an example of sustainable development.

Tom: Why is it so important that companies like ours create and develop products that make a difference?

Jim: Quite simply, it is the nature of the chemicals business.

It’s important that we produce new products for what the world requires.

And sometimes those products may be common ones. For example, chlorine is a commodity that has been around for many, many decades and yet the chlorine we produce in the UK purifies 98% of the country’s water supply. Now that is a statistic to be proud of. We have also developed a bio-chlor membrane process to remove mercury and improve the efficiency of making this chlorine by some 30%.

Another example is synthetic motor oils. Car engines are getting more and more complex and they are getting more and more efficient and therefore they need high quality motor oils to operate them. We produce synthetic oils and this goes into top-end lubricants.

But it doesn’t stop there. We also use similar things in compressor boxes and in gear boxes and a good example is a special form of lubricant that we have developed for wind turbines. You can imagine if you have set up a wind turbine - it is on a tall structure and the gear box is high in the sky – you won’t want to be climbing up and down that structure every week to lubricate it. That’s why we have developed products that have a good sheer strength, last a long time, are good lubricants, reduce friction, and are ideal to extend the service life of the wave of wind turbines we see around the world.

We are also a producer of acrylonitrile, which is the precursor to carbon fibre. Carbon fibre is light and strong. If you use them in aircraft you can reduce fuel consumption by about 30%. Of course, you are moving a lighter structure around the sky so it is not just carbon fibre in golf clubs. In transport you can make a big difference. We do feel at INEOS that we make products that make a real difference.

A safety first for INEOS

Safety is INEOS’ top priority. The company knows that its businesses won’t last long if it takes the safety of their employees and those living close to its manufacturing plants for granted. For years INEOS as a group has kept very tight control on its performance, using a system it inherited from ICI. Today it is doing things differently. It wants the world to be able to judge its performance against the very best

The world will soon be able to fairly judge INEOS’ safety performance against other petrochemical companies.

Multi-national chemical giants Shell, Dow Chemical, BP, and Exxon have, for years, reported their workplace injuries and illnesses according to the rules of the Occupational Health and Safety Administration (OSHA), a federal agency of the United States Department of Labour that was founded during Richard Nixon’s US presidency in 1970.

For years INEOS – a company that has grown from acquisition – has used a system for recording ‘classified reportable injuries’ and illnesses that it inherited from ICI.

Now, though, it has decided as a Group to report under OSHA’s Umbrella, in line with other companies.

“Although the OSHA record keeping is an American-based system, it is recognised globally,” said Stephen Yee, Business Safety Health and Environment Manager based at INEOS ChlorVinyls.

“This will make it easier for us to compare our safety performance against the likes of Exxon,” he said. “We will now be able to compare like for like.”

INEOS’ businesses in the US already fall under OSHA regulations and INEOS Olefins & Polymers USA’s two largest facilities have already earned OSHA Star and Merit ratings under the Voluntary Protection Program (VPP).

Companies that qualify to join this programme must operate an effective health and safety systems that meets rigorous performance-based criteria. In short, they are deemed to go above and beyond what OSHA expects of them.

The INEOS system has worked extremely well and has enabled the company to significantly improve the safety performance of its businesses. As the company has grown over the years INEOS saw no need to change it.

The decision to now switch to OSHA record-keeping guidelines is a big and bold step.

“OSHA is very different,” said Stephen.

Whereas INEOS would not log an incident as a ‘classified reportable injury’ if a member of staff were prescribed paracetomol by a company doctor, OSHA would expect it to be recorded under its recording guidelines.

“Safety remains our highest priority and by making this change we will continue to monitor and improve our safety performance but the company will be recording events in a slightly different way” said Stephen.

To make the transition easier – and so that staff know that INEOS’ safety performance has not deteriorated overnight – Stephen said he had compiled a report to show how INEOS would have fared under OSHA record-keeping guidelines since 2002.

“We wanted to give staff an indication of what the figures would have looked like, across the company,” he said.

Since October, INEOS has been running both systems to ensure continuous improvement.

“By doing that our employees can continue to see what our performance would have been like under our old system,” said Stephen.

Making this change does not alter the company’s legal compliance and INEOS will continue to meet its regulatory requirements. “In every country we have local, legal requirements,” he said. “That won’t change.”

For the past four years INEOS’ safety record has improved year on year, and 2012 would have been its best year to date, save for a process safety incident at Lavéra in France last December, during which five firefighters were exposed to higher than normal noise levels.

“Because they were off work for more than three days it became a classified reportable injury,” said Stephen.

Safety is – and has always been – INEOS’ top priority, and INEOS prides itself on being open and honest about what it does, how it does it and the impact it has on its staff and those that live and work close to its 51 manufacturing sites.

“We have always tracked and reported more than we were required to do by law,” said Stephen, “and that engrained approach will not change under the OSHA system.”

Although some in the company may be unaware of OSHA, plenty others will know about the way it operates.

“OSHA won’t be totally new to many people because over the years INEOS has acquired businesses from companies where this system would have been operated before,” said Stephen.

All staff that are required to make the determination of an OSHA injury were trained in September last year and Stephen is on hand (along with teams from its US businesses) if there are any cases of doubt.

“For us, this does not change our view of the importance of safety across every aspect of our business. It is now just a different way to do things, but it is important that we make the transition smoothly and spend our time focused on keeping safe,” said Stephen.

Jim’s a leader in his field

INEOS chairman Jim Ratcliffe has won an award for his outstanding contribution to the world in which we live.

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Jim Ratcliffe is presented with the Petrochemical Heritage Award

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He was presented with the Petrochemical Heritage Award at the 2013 International Petrochemical Conference in San Antonio, Texas.

Previous winners of this lifetime achievement award – long viewed as one of the most prestigious by the industry – have included some of its most prominent pioneers from all corners of the globe.

Tom Tritton, president and CEO of The Chemical Heritage Foundation, said Jim had been this year’s overwhelming winner due to INEOS’ rapid growth and incredible success over the past 15 years.

“Science-based industries need people like Jim,” he told INCH magazine after the ceremony. “He combines an understanding of basic science with an acute level of insight into how to translate science to practical application.

“He also knows how to take well-timed risks that will turn ideas into reality.”

It is the first time that a Briton has ever won the award in its 17-year history – a fact that did not go unnoticed by Jim.

“I was a bit concerned that your standards were slipping,” he said with a smile.

But the former chemical engineer, who graduated from Birmingham University in 1974, said INEOS’ success was not the work of just one man.

“I am here because of what INEOS has achieved but it has not just been myself who has done that,” he said.

“We are quite a tightly-knit group of people in INEOS so it has very much been a team effort to get us here.”

INEOS, he said, worked in a different way to most similar-sized companies.

“We are more like a federation of businesses,” he said. “We give our businesses a lot of autonomy. We give our management and chief executives a lot of autonomy and independence.

“That’s why people in INEOS behave, I hope, more like owners than employees. And it hopefully generates that spirit of entrepreneurship, being nimble and making quick decisions.”

He said INEOS was very focused on fixed costs, operating reliable machinery, profit and safety.

“Everybody in our industry talks about safety but we have about 10 or 15 board meetings a month and the first item on every board agenda is safety,” he said.

During his acceptance speech and subsequent Q&A, Jim also touched on INEOS’ proud history, the 2008-2009 recession and how INEOS managed its way out of that crisis and the shale gas boom which has transformed America’s manufacturing industry.

He also spoke about why INEOS disliked bureaucracy – ‘it suffocates businesses’ – and why, he believed, the UK, once home to INEOS’ headquarters, was still in recession.

“I am a firm believer that any economy must have a strong manufacturing base,” he said.

“The main reason that the UK has not come out of this recession is because it has no, or very little, manufacturing.”

He said it had been quite depressing to witness the virtual collapse of manufacturing in the UK where 15 years ago it had been on a par with Germany – at about 25%.

Today only about 10% of the UK’s economy is manufacturing while Germany’s is still at 25%.

That happened, he said, because the British Government, at that time, had been more interested in financial services than manufacturing.

“They thought financial services was the future,” he said.

Jim told guests that for manufacturing to be successful in any country, it needed to have unique selling points (USPs).

“If you look at the UK today, there are not many USPs,” he said. “There are not many reasons why someone what want to manufacture in the UK, other than perhaps the English language.

“Taxes are relatively high, the unions are difficult, pensions are expensive, there are logistics and energy costs are extremely expensive.”

He said America – on the other hand – had ‘lots and lots of USPs’.

“You have skilled labour, the unions are sensible, pensions are sensible, and you have this enormously strong new one, which is cheap energy and cheap feedstock,” he said.

During the question and answer session, Jim was asked about shale gas – the cheap feedstock that has revived America’s manufacturing industry – and whether the US government should limit shale gas exports to protect the American economy.

“I can understand it in certain areas perhaps it being restricted,” he told them. “But across the board I think that would be regarded by the world as creating a difficult precedent because America imports a lot of oil.”

As the 17th recipient of the Petrochemical Heritage Award, Jim joins an elite group, including the former president of Cain Chemical and the founder of Texas Petrochemicals Company.

“Jim’s career shows how an optimizer steadily grows,” said Tom Tritton. “He has taken INEOS through two major industry downturns to success after success.

“He is also clearly a man who is in for the long haul. He has held the chairmanship at INEOS since 1998 and this year he finished, Paris, London and Geneva Marathons in under four hours.

“To me, running a marathon is a wholly admirable accomplishment. It demonstrates dedication, persistence in the face of adversity, and a willingness to take on hard goals.”

The Chemical Heritage Foundation and the Founders Club established the Petrochemical Heritage Award in 1997 to recognise inspiring individuals who had made an outstanding contribution to the petrochemical industry and promoted public understanding of the modern sciences, industries, and economies. 

What’s in a name

Ever wondered where the INEOS name comes from?

It was a question asked of Jim Ratcliffe after he accepted his award in Texas.

Two sons, two dictionaries and an acquisition deadline led to the company’s unique name when it was first established 15 years ago.

On the Friday before Jim was to close the acquisition of the company his lawyers needed a name. By Monday.

On Saturday morning, Ratcliffe bought two dictionaries, one Greek, one Latin and sat down with his two sons, then aged 10 and 12. The three then set to work on a name. And at a cost of $20, they came up with one word that holds a lot of meaning.

The new company’s business was previously INspec Ethylene Oxide and Specialties, so the letters fell into place.

From the dictionaries the three found ‘INEO’ which is Latin for a new beginning. ‘EOS’ is the Greek goddess of the dawn and ‘NEOS’ is new, novel and innovative. So the name was chosen – ‘INEOS’ - representing the dawn of something new and innovative.

The company has been living up to its name ever since.

The road to the future

Some say that behind every successful man is a great woman.

German car engineer Karl Benz, if he were alive today, might well agree with that.

For it was his wife Bertha’s publicity stunt in 1888 that focused the world’s attention on his patented Motorwagen and earned the company its first sales.

On August 5, without telling him, she borrowed his car and set off on an historic journey from Mannheim in Germany with their two oldest children. It was the first time anyone had attempted to drive a car over such a long distance.

People thought cars were dangerous and unreliable. And no one wanted one.

Bertha decided to prove otherwise. She wanted no one to be in any doubt. The car was the future.

She set off before dawn and, shortly after dusk, arrived at her mother’s home in Pforzheim from where she sent Karl a telegram, informing him of the good news. The following day, she confounded the critics even more by driving home whereupon she presented her husband with a list of suggestions for all the mechanical things that had gone wrong during her trip.

That 106km journey 124 years ago triggered a love affair with the car that continues to this day.

Back then, it might have been convincing a sceptical public that it was a viable method of travel. Today it’s finding a way of keeping the growing millions of cars on the roads whilst reducing their impact on people and the planet.

And it’s a full-time job.

For technology is moving so fast that it’s hard to predict which direction the industry will eventually go.

Will cars be run on hydrogen, biofuels, fuel cells, solar power, electricity, liquid nitrogen or natural gas? Will they be built from plastic, carbon fibre or aluminium?

There is not going to be a single solution but the direction is the same. Cars of the future need materials and technologies that will make them lighter and safer, reducing fuel consumption and dramatically cut down on exhaust emissions.

Conventional cars currently operate at about 15% efficiency so the potential for improvement with advanced technologies is enormous.

Scratch the surface and you will find that INEOS is already at the heart of so many of the advances that are being made by manufacturers to make cars stronger, safer, lighter, sexier and more efficient while also satisfying those concerned about the environment.

Plastics is a big one that is pulling its weight.

So too is carbon fibre. But there are a host of other raw materials made by INEOS that are going into tyres, seat belts, brake fluid, anti-freeze, air filters and synthetic oils.

INEOS’ Olefins & Polymers makes the high density polyethylene and polypropylene, which form the backbone of the entire plastics manufacturing industry.

Car manufacturers especially like plastic because it can be moulded into virtually any shape but there’s more to plastic than just versatility.

It’s also incredibly strong while being much lighter than steel, which as a result enables lighter, more fuel-efficient cars that do not compromise on safety.

Today most fuel tanks in Europe and America and about 40% in Asia are believed to be made of plastic instead of steel because they are lighter, can be recycled and don’t corrode.

And some of the world’s leading producers are using INEOS’ custom-engineered polymers to make them.

The use of carbon fibre is another exciting area and INEOS’ Nitriles business, which is the world’s largest producer of key carbon fibre ingredient acrylonitrile, is at the heart of that too.

Carbon fibre is 50% lighter than steel yet about five times stronger. The challenge is to find a way of making it more affordable so it can be mass produced.

INEOS says, if that happens, the potential environmental benefit, given the number of cars on the roads around the world today, is enormous.

Look closely at the electrics in most cars and you will find that all the wiring is coated in PVC largely because it is flame resistant – a factor which will become ever more important as the number of electrical components in cars increases.

“PVC cabling doesn’t perish unlike rubber,” said Dr Jason Leadbitter, Sustainability & Compliance Manager at INEOS ChlorVinyls, Europe’s largest PVC manufacturer.

His colleagues at INEOS Oligomers, meanwhile, are working closely with the manufacturers of synthetic oils and additive suppliers to deliver what their customers want. Advanced synthetic oils are helping to reduce wear and tear on engine components, whilst helping to improve the efficiency of modern engines for longer.

“Today demand for better fuel economy has increased both end-user and car manufacturers’ interest in low viscosity engine lubricants,” said Michel Sánchez, PAO market development manager at INEOS Oligomers. “And that trend will continue with the introduction of new, tailor-made viscosity grades.”

He said INEOS’ Group IV base oils – known as PAOs – performed above and beyond in maintaining engine durability, performance and reliability

At INEOS Olefins & Polymers, the raw materials for butadiene are also produced to create synthetic rubber for tyres. The beauty about butadiene is that it performs equally well whatever the weather and can withstand a lot of wear and tear compared with other rubbers.

There are currently more than 160 tyre manufacturers in the world who spend over £1,000 million every year in research and development to make cars more efficient, enhance handling and improve stopping distances.

Treading that road too is INEOS Phenol.

Its phenol goes into resins to make tyre tackifiers and nylon intermediates to make tyre cord and other engineered thermoplastics.

But INEOS Phenol’s involvement doesn’t end there.

Phenol and acetone are both needed to make polycarbonate, a magical, pliable material that is used extensively to make sun roofs, side windows, tail lights, headlamps and other car parts.

The good thing about polycarbonate is that it can be moulded into a single piece, it is light and incredibly strong, which means better protection in the event of an accident.

INEOS Phenol also makes acetone which is used in Perspex, in acrylics for the paints, along with resins for brake pads and air filters.

Perhaps the biggest question of all, though, is how will cars of the future be powered?

Every car company without exception is considering the alternatives to fossil fuels and how this shapes their product.

It is an area that INEOS is also involved.

It has built a plant in Florida that is designed to produce eight million gallons of advanced biofuels from waste every year for the cars of today and tomorrow.

Meanwhile, their colleagues at INEOS ChlorVinyls have helped to create a ‘hydrogen highway’ across Norway by providing a clean form of hydrogen.

The hydrogen, which is essential for fuel cells, is a by-product of INEOS’ chlor-alkali process at its Rafnes site.

“It provides fuel from one of several hydrogen fuelling stations that are now forming a corridor from Stavanger to Oslo,” said Jason.

No-one should ever doubt the importance of the chemical industry to the car industry.

The International Council of Chemical Associations said recently that chemical products for vehicles were now saving 230 million tons of greenhouse gas emissions every year.

In a report to the Rio +20 summit, it also highlighted how metallocene catalyst technology, licensed by INEOS Technologies, had been a major breakthrough in the manufacturing of plastics.

“Metallocene polymers also enable modified plastics to be used more widely in automobile applications, replacing steel,” the ICCA said.

Whatever happens, the car manufacturing industry will continue to look to companies like INEOS for answers.

Thankfully INEOS has plenty.

FUEL TANKS

Plastic fuel tanks are replacing steel because they are lighter (lighter cars improve fuel economy), they can be recycled and don’t corrode. INEOS Olefins & Polymers manufactures the high density polymers for plastic fuel tanks.

TYRES

There are currently more than 160 tyre manufacturers in the world who spend over £1,000 million every year in research and development to make cars more efficient and improve stopping distances. INEOS Olefins & Polymers produces the materials used to make for tyres. These help to improve performance and reduce wear and tear. INEOS Phenol produces phenolic resins that are used to make tyre tackifiers and its alpha methyl styrene helps to produce better, fuel efficient tyres.

INTERIORS

Plastics are being used inside cars to improve aesthetics and safety. INEOS Olefins & Polymers manufactures the high density polyethylene and polypropylene that form the backbone of the entire plastics manufacturing industry. Phenol and Acetone from INEOS are both needed to make polycarbonate that is also being used to reshape car interiors and exteriors. INEOS Phenol’s phenol and acetone are both needed to make polycarbonate.

FUEL

The world is looking for an alternative to traditional fossil fuels. INEOS Bio’s technology produces advanced biofuels (from waste not crops) to be blended with petrol. The technology also produces renewable power that could be used to charge batteries.

SYNTHETIC OILS

Demand for better fuel economy and better performing engines has led to an increase in the interest in low viscosity engine oils. INEOS Oligomers provides the manufacturers of synthetic oils and additive suppliers with the high performance base oils that help to improve a car’s overall efficiency.

BODY PARTS

Carbon fibre is 50% lighter than steel but about five times stronger. More of this product is being used in cars to reduce weight without compromising safety. INEOS Nitriles is the world’s largest producer of acrylonitrile which is the essential ingredient in carbon fibre. Without it, carbon fibre would not exist.

ELECTRICS

PVC is used to coat the wiring of electrical components in cars because it is flame resistant and, unlike rubber, doesn’t perish. INEOS ChlorVinyls is Europe’s largest PVC manufacturer.

Good Chemistry

The world faces a constant and growing challenge. How does it meet the demands of a rapidly rising population – last count seven billion – with finite resources, in a way that does not threaten the planet? One sector that has an answer and is doing more than the public realises to meet that challenge is the global chemical industry.

Around the world, the chemical industry is working hard to find solutions to many of the issues that a rising population presents society.

That work – since the first historic Earth Summit in Rio de Janiero in 1992 – has helped to ensure that farmers adopt sustainable agricultural methods and that more and more people can access cleaner, safer drinking water. It has further led to medical breakthroughs, transformed the way energy is used and is helping to reduce greenhouse gases.

And the work goes on.

Last year, the chemical industry, which directly employs more than seven million people worldwide, took stock of what it had achieved over the past 20 years since that first United Nations Conference on Environment and Development, and looked forward at how it could collectively begin to address the challenges that have emerged since.

During the Rio + 20 conference, which was attended by representatives from 196 nations, Steve Elliott, chief executive of the UK’s Chemical Industries Association, said that the chemical industry had been at the forefront of the emerging green economy.

“Without chemical businesses, green technology and the green economy simply cannot happen,” he said.

Mr Elliott said he hoped Rio +20 would show the world how the industry and its stakeholders had worked together to enable people, the planet and companies to thrive.

Some of that progress has been highlighted in a report published by the International Council of Chemical Associations, the worldwide voice of the chemical industry.

ICCA president Andrew Liveris said during a panel discussion that progress had been the result of innovative ideas, technologies and processes, all made possible only through chemistry.

“Around the world, the chemical industry is enabling the very solutions we need to meet the global challenges,” he said.

In its report, the ICCA said building a green economy would depend on innovative solutions from all sectors – a view shared by UN Secretary General Ban Ki-moon.

“In these times of austerity and economic uncertainty, public sector efforts alone will not be sufficient,” he said.

“We need everyone at the table – investors, CEOs, governments, civil society groups, technical experts and practitioners – working in a common cause.”

Carlos Fadigas, chief executive of Brazilian chemical company Braskem, also took part in the ICCA panel discussion at the summit.

He said that the efficient use of resources was crucial.

“We must focus on sustainable consumption as well as sustainable production, with a commitment to producing goods and services efficiently and consuming them differently,” he said.

“To achieve that, it is crucial that each company puts sustainability as a core driver of its business strategy. More and more chemical companies are doing that.”

The ICCA said it hoped Rio +20 would spur governments into creating the right environment that would allow chemical companies to act swiftly to find even more innovative solutions to the world’s changing needs.

“Innovative, efficient solutions are required to achieve sustainable development,” it said.

“And contributions of the global chemical industry will play an essential role in the transition to a green economy envisioned by Rio +20.”

The ICCA also continues to encourage developing economies to responsibly use and handle 2,000 plus chemicals currently on the market, through its training workshops, which have so far been conducted – in such places as the Middle East, Africa and Asia – by leading chemical companies that are keen to share best practices.

“Promoting safe management and use of essential products of chemistry is a shared responsibility of manufacturers, government and all those who sell or use chemical products,” it said.

Rio+20 followed the publication of The European Chemical Industry Council’s first-ever sustainability report designed to raise public awareness of the benefits that the industry brings to society.

Cefic is the European Chemical Industry Council. This Brussels-based organisation said its own surveys and external research had shown that public opinion of the chemical industry differed from one country to the next.

The report, which highlighted examples of innovative products and initiatives, and groundbreaking advances, aimed to improve the public’s generally negative perception of the chemical industry.

“The chemical industry is, perhaps, better placed than any other sector to tackle the challenges of sustainability,” he said.

“After all there’s virtually no product, no service or human activity that does not in some way rely on the contribution of chemistry.”

In its report, Cefic stressed the importance of open communication.

“Partnerships and collaboration within industry are essential,” said Mr Giorgoi Squinzi President of Cefic. “But so too are partnerships with authorities, those in the supply chain, and academic and research institutions.”

The climate is changing

On the face of it, you would not expect one of the world’s leading environmentalists and the world’s third largest chemical company to share much common ground. But the climate has changed, as the former adviser to the UK Government Jonathon Porritt has discovered.

Environmentalist Jonathon Porritt believes privately-owned companies, like INEOS, are now best placed to change the world for the better.

He said they had the will, the desire, the know-how and a convincing business case to help combat climate change and other pressing sustainability issues.

“The real leadership to create a sustainable world is coming from the private companies,” he said. “It is not coming from governments. At the moment governments are paralysed by their own mediocrity.”

But he said governments could help by de-risking the flow of investments so that the capital markets could clearly understand what a sustainable world would really look like. That meant consistent policy-making, and using incentives to help frame capital markets for the long term.

“Governments don’t just have a mandate to make things happen,” he said. “They are also there to stop bad things happening.

“INEOS has shown a readiness to deploy its intellectual innovations. A pipeline of solutions to the sustainability dilemmas that we face today. INEOS is one of those companies in a position to respond to these opportunities.”

Jonathon spoke to INCH magazine after drafting a report for the British Government on the future of industrial bio-technology.

In it, he highlights INEOS’ ground-breaking achievements in Vero Beach, Florida, home to the first commercial scale plant of its kind in the world that is capable of turning a range of waste into advanced biofuel and renewable power.

His report – published on January 22 – is aimed primarily at industry to encourage it to think differently, rather than government ministers.

But that said, Jonathon agrees Government must still play a part.

“I am not recommending more regulations, but they can make a big difference,” he said, “especially on major issues like climate change.”

Jonathon said that INEOS, like all big chemical companies, was still ‘addicted to oil’, but that it had a good track record in many areas.

He was referring to INEOS’s involvement in The Natural Step, a global sustainability initiative, originally launched in Sweden, to provide a rigorous scientific framework for the changes that need to be made in our economy.

INEOS and Norsk Hydro were approached as two of the of the world’s largest producers of PVC.

“That involvement was critical,” said Jonathon.

At the recent European plastics summit in Germany, Jonathon praised INEOS – and the plastics industry as a whole – for what they were now doing to help create a more sustainable future.

“Those endeavours give a lie to the image many people still have in the European Union of plastics as an on-going environmental horror story of unparalleled proportions,” he said during his speech to the PolyTalk summit in Wiesbaden.

He said the extraordinary wealth of new ideas coming from all the industries that relied on plastics – cars, electronics, health, farming, packaging, energy, lighting and construction – also gave him hope of a better, brighter future.

His comments were warmly welcomed by Dr Jason Leadbitter, Sustainability and Compliance Manager for INEOS ChlorVinyls.

“PVC is often singled out among the other plastics, and not always for the best of reasons so it was extremely encouraging and heartening to receive such praise,” he said after the summit.

During his talk, Jonathon explained that the difficulty facing the plastics industry would be convincing those outside the industry.

There was a serious credibility problem because of the way the industry had often behaved in the past.

But he said he also understood the frustration at environmentalists who were completely preoccupied with the past, rather than the future.

However, he said the plastics industry needed NGOs (non-governmental organisations) because they had earned the trust of society, which allowed them to act as intermediaries in complex, controversial debates.

“Deep down, if we don’t work more effectively together, the prospects for the industry are much less good than they might be,” he told the summit.

But Jonathon was not without criticism of the role of the NGO. He said he often felt deeply frustrated at the way NGOs sometimes abused that trust, especially in the UK where he blamed some NGOs for whipping up people’s NIMBY (‘Not in my back yard’) tendencies, particularly regarding new waste management technologies.

“If they deployed a fraction of this energy to direct people’s attention towards a much more integrated, sophisticated approach to managing waste in our society, we’d be in a very different place,” he said.

As chairman of The Natural Step in the UK, he said he had experienced some of these difficulties when working with INEOS and Norsk Hydro on an initiative to define exactly what a ‘truly sustainable PVC industry’ would really look like.

“Some NGOs thought it was inappropriate to be even having this discussion,” he told the PolyTalk summit. “They felt it was impossible to articulate a genuinely sustainable vision for the future of PVC. They saw it as a ‘contradiction in terms’, and eventually walked out of the dialogue.”

Yet that Natural Step initiative led eventually to the development of Vinyl 2010, a voluntary 10-year commitment to look at what the plastics industry could do about PVC not just in the UK, but across Europe.

“The good thing about Vinyl 2010 was that it was indeed voluntary, but that it also had teeth,” said Jonathon.

“A huge number of initiatives don’t have any teeth so it’s easy for companies to sign up to them because there are no consequences while they just sit around and do nothing.”

Since then, the plastics industry has gone even further and signed up to VinylPlus, which has set even more ambitious targets for sustainable development.

During his interview with INCH, Jonathon said that the legacy of ill-feeling and antagonism between business and NGOs was partly an historical problem.

“In the past, industry and NGOs always seemed to be at loggerheads, with one confrontation after another,” he said.

“Today most NGOs are happy to work with businesses if they feel the business understands what they are trying to achieve.”

He told INCH magazine that even as recently as 10 years ago, companies had struggled to understand the concept of sustainability.

In the 1990s, ‘greenwashing’ was also prevalent with many top-end companies making spurious claims to please their customers by appearing environmentally-friendly.

“There were some companies who flirted outrageously with sustainability but it was never consummated,” he said. “This was a serious matter because it led to intense scepticism, and people then thought they were being conned on green issues.”

That had now changed, he said, and there were three good reasons why companies were now becoming more sustainable, and realising it made good financial business sense to ensure their companies had the resources to compete more sustainably in the global markets.

He said the three key drivers for more sustainable wealth creation were government regulation, consumer expectation and industry innovation.

He went on to say how impressed he was at how many businesses were now waking up to the difficult challenges ahead, and facing up to their responsibilities.

“Politicians are there to win short-term votes, but businesses are in it for the long-term,” he said.

However, he did express some regret that, although consumers talked a lot about sustainability, they did not always shop with their consciences.

“That can be very frustrating,” he said. “But more sustainable companies can still hope that their consumers will eventually reward them in the right way.

“However, sustainable products should not be more expensive because that just won’t work.”

Tricoya harvests INEOS’ expertise

The trade in tropical hardwoods, such as mahogany and teak, has long been seen as a major reason for the destruction of the rainforests. Some of that demand could soon change thanks to INEOS’ teaming up with a small, innovative Anglo-Dutch company. 

INEOS has formed a partnership with an Anglo-Dutch company whose innovative technology could help to prevent the need to use hardwood taken from the world’s rainforests.

It has signed a deal with Accsys Technologies Plc, a small AIM-listed quoted company, which has developed a ground-breaking technique to turn soft wood, harvested from fast-growing, sustainable forests, into a resilient long-lasting wood, with properties at least as good as those of tropical hardwoods.

“I think the world as a whole recognises that these forests cannot be chopped down anymore, and our unique technology will contribute to reversing the need for tropical wood from rainforests,” said Paul Clegg, chief executive officer of Accsys.

“We want to have licensed operators using our technology all over the world. It may take a while. It may be a lofty ambition but we think it is very possible.”

INEOS’ role in the new company, Tricoya Technologies Ltd, will be to use its vast experience, excellent global connections and expertise in licensing technologies to sell the Tricoya acetylation technology to the world.

“Without INEOS, we would have got there in the end but it would have taken longer”, said Paul.

“A lot of people have great ideas but what counts is the successful implementation of an idea.

“INEOS’ involvement will make the difference and increases the likelihood of its successful execution.

“It will accelerate the roll-out of Tricoya, and INEOS also has contacts in markets, such as China, India and Russia, which we don’t.”

Negotiations between the two companies to exploit a market, worth about €60 billion a year, began about 18 months ago.

INEOS was excited by what Tricoya could offer the world and how its patented technology could revolutionise the wood-panel market. Accsys needed a partner with a global reputation for excellence.

“It can be a very long process to convince markets that you have the better product and have the breakthrough technology,” said Pierre Lasson, general manager at Tricoya.

“INEOS will be able to speed up that process by bringing its expertise to support this innovative technology.”

What INEOS offers is effectively ‘third party validation’, which money cannot buy.

“People are more inclined to believe those who have bought a product or use it, rather than a company itself,” said Paul.

Together the two companies will combine their strengths to develop the manufacture and sale of Tricoya’s engineered wood products. 

What is special about the Tricoya technology is that it opens up new horizons for products, such as MDF, which itself revolutionised the industry in the eighties.

For although MDF was hailed as the ultimate in versatility and reliability when it was first commercialised in 1980, its weakness was that it absorbs water like a sponge, rendering it useless outdoors or in wet, ‘hostile’ environments. 

“If you put it in a bucket of water, it turns to mush,” said Paul.

Tricoya retains all the positive things about MDF but it does not retain water, which means it does not warp, swell or rot. Instead the process improves the wood’s durability and stability, turning it from a soft wood panel into a wood panel with class 1 durability properties and with a 50-year guarantee for external use above ground.

“What is especially unique about Tricoya is its resistance to water which means it can go where no other soft wood has ever gone before, into new markets where traditionally other products – such as PVC and aluminium – have been favoured,” said Paul.

That is likely to please, and benefit, the construction industry – often rewarded for using sustainable materials – and wood panel manufacturers whose margins are low because their products are so cheap.

“We can help them to create higher value products, which will give them a better return,” said Paul. 

The other beauty about Tricoya is that it consumes carbon dioxide. When the tree is harvested, the carbon is captured and because it doesn’t rot, it holds the carbon.

“Even when our product does reach the end of its shelf life, it can be burned for energy,” said Paul.

The release of carbon dioxide into the atmosphere is currently giving Canada a thumping headache.

Huge swaths of its forests have been hit by an outbreak of mountain pine beetle, which are killing millions of trees. Researchers believe that by 2020, the pine beetle outbreak will have led to the release of 270 megatonnes of carbon dioxide. 

On March 5th Tricoya was named Product of the Year by Sustain Magazine.

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Tricoya harvests INEOS' expertise

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“Obviously the award does bring kudos,” said Paul. “But kudos doesn’t put food on the table.

“What it does do, though, is validate our process and products because it says that someone else agrees with what we are saying.”

It is the Joint Venture with INEOS, though, that has given Accsys the biggest cheer.

“Tricoya is our baby but what appealed to us about INEOS was that it has all the attributes of a larger company, but unusually it is a privately-owned company,” said Paul.

“It is fast acting and has a real interest in fostering sustainable ideas. And that is an unusual mix.”

Paul said trust and confidence had also played a significant – and important – part in Accsys’ decision to ‘share the spoils’ with INEOS.

Peter Williams, chief executive officer of INEOS Technologies, said he was looking forward to the joint venture accelerating the commercialisation of the new process around the world.

“Tricoya offers the building industry valuable new options for the application of high performance, cost-competitive and more sustainable wood-based materials,” he said. 

“Our skills complement those of our partner, and together we will realise important synergies for the new company.”

INEOS to join forces with Solvay to create a world-class PVC producer

INEOS signed a Letter of Intent (LOI) to combine its European chlorvinyls activities in a proposed 50-50 joint venture on May 7th. The combination of the two businesses would form a polyvinyl chloride (PVC) producer ranking among the top three worldwide. It would build on the strengths of both our companies’ industrial assets, the skills to enhance competitiveness.

“This agreement will result in the creation of a truly competitive and sustainable business that will provide significant benefit to customers such as reliable access to PVC,” said Jim Ratcliffe, “The newly combined business, which will be of world scale, will be able to better respond to rapidly changing European markets and to match increasing competition from global producers.”

The agreement provides the mechanism under which INEOS would acquire Solvay’s 50% interest in the joint venture between four and six years from its formation, after which INEOS would be the sole owner of the business.

INEOS Nitriles and Tianjin Bohai Chemical Industry Group Corporation to form Joint Venture

On 22nd May, INEOS Nitriles and Tianjin Bohai Chemical Industry Group Corporation signed a non binding Heads of Terms. The agreement set out their intention to form a 50/50 Joint Venture, to build and operate a 260,000 tonne Acrylonitrile plant located in Tianjin, China. It is expected that the plant, which will be designed using the latest INEOS process and catalyst technology, will be completed by the end of 2016.

Rob Nevin, CEO of INEOS Nitriles said, “This is an important investment for the Nitriles business in Asia to support our customers’ growing needs across the region. We are very pleased to be building this new facility with Tianjin Bohai Chemical through the formation of the Joint Venture. Our partnership is set to bring considerable value to both companies and their customers. Bringing together our proprietary Acrylonitrile technology, with Tianjin Bohai Chemical’s expertise and advantaged feedstocks, presents a formidable combination.”

This is the second Joint Venture project INEOS has announced in China this year. In March INEOS Phenol initialled a joint venture agreement with Sinopec YPC. Both Joint Ventures bring together our world leading technology with a strong Chinese partner. They will add up to a total investment across all partners of more than $1 billion.

INEOS strikes gold at Seal Sands

Apprentices sometimes left floundering in unfamiliar roles are now being turned into world-class performers.

And they have INEOS to thank for that.

INEOS Nitriles discovered the haphazard approach to training when they acquired the Seal Sands site on Teeside in the UK in 2008.

They found that the training of new starters and apprentices was ad-hoc and disjointed and that limited refresher training was available for existing production technicians. All the training was also carried out by members of staff in addition to their main jobs.

INEOS knew that to get the best out of the site, it first needed to get the best out of the staff and that meant creating a dedicated team of trainers whose sole job would be to improve the skills of its chemical workforce.

The company brought together four experienced process co-ordinators with in depth knowledge of their individual plant areas.

Initially they focused on assessing, retraining and re-certifying all the existing production technicians to ensure everyone had a basic understanding and ability.

It was time-consuming but it provided the four trainers with a clear idea of future training needs.

From the HR database, they also discovered that 70% of the existing production technicians were due to reach state retirement age within the next 10 years.

Since that initial assessment they have introduced a new refresher programme – which is delivered on and off shift – to maintain skill levels, transfer INEOS knowledge from other INEOS Nitriles’ sites and integrate any changes to the plant or processes.

They have also developed 32 basic initial training sessions which all new starters attend before they move on to their specific plant training. To ensure that the training is up-to date and relevant, a quality control system has been set up with the support of site specialists.

INEOS was so proud of the group’s achievement – and plans – that the Middlesbrough site commissioned The National Skills Academy Process Industries to audit its training process.

The result? INEOS Nitriles’ training programme at the site has now been awarded the Cogent Gold Standard, which sets the skills benchmark for world class performance.

“We are obviously delighted that our commitment and hard work has been recognised,” said Dave Hart, training and development manager at Seal Sands.

“The fact that we can now use the Gold Standard logo on our correspondence and the INEOS logo is on the Cogent/ NSAPI Roll of Honour is a reflection of the great commitment to on-site training which INEOS have shown since taking over the Seal Sands site.”

But the hard work doesn’t end here.

Dave said they were now keen to move on to the next stage.

“We plan to have our internal site training verified as a recognised qualification by an external awarding body,” he said.