Integra Petrochemicals shareholder QXTD (Qixiang Tengda) has entered into an agreement with Evonik and ThyssenKrupp. Can you please elaborate on the details of this agreement?
The agreement relates to the construction of a new propylene oxide plant (annual capacity of 300,000 tonnes per annum) at its petrochemical site in Zibo, China. With the global polyurethane market still growing, China is one of the most important growth markets and currently imports ever larger amounts of raw materials.
The plant will be based on HPPO technology and will sit next to the company’s already announced PDH plant. The plant is expected to come on stream in the first half of 2022. As part of that, we have invested into a port and terminal in China to allow us to import the propane needed for the PDH.
Integra and the rest of Cedar Holdings are excited to see this next step in the company’s commitment to build out around c3/c4 derivatives.
It is more than a year since you were appointed as the chairperson of the new board of Integra Petrochemicals. With its new shareholders taking up their seats, post the acquisition of the company, what were the key challenges and opportunities in front of you since the acquisition?
In the day to day, there has not been a lot of change, we are all just busier, with extra responsibilities, a wider range of products and more opportunities. We are still Integra and everything that our name has stood for over the last 30 years. So, on that front it is business as usual – the same people, the same service!
At the same time, we are part of a stock-listed company and while one of our shareholders remains the founding family of the company, the other major shareholder is number 305 in the Fortune 500 list of companies. Fortunately, the two shareholding groups share many of the same ideals, principals and attitudes to their staff and customers. So, it actually works well, and there have been very few integration issues.
We have always, fortunately, although a private company, followed many of the rules set out for stock-listed companies in Singapore. That prepared us to a certain extent for the stringent requirements and regulations of being part of a stock-listed company, which could otherwise have been challenging.
Of course, being part of the international expansion of a large company is always exciting especially since we are the most international part of the group. So, that gives a new buss around the company.
As part of the IMO’s year of empowering women in maritime, WISTA celebrated an event at the IMO in London on 11 July 2019. You attended this event as a Guest of Honour. What was the significance of this event in your career?
It was an incredibly proud moment for the three of us – founding members – who were able to attend. For me, in many ways, it was a great honour to stand there, looking at how successful WISTA has become over the length of my career.
Possibly, WISTA’s formation and success, means more to me than the awards and recognition that I have been so lucky and fortunate to receive over the years. This has made a lasting and important change to generations of women joining our industry. In many ways it was also a quiet moment of retrospection on how things were at the beginning of my career in comparison to where things are now, and how far we as an industry still are to being able to recruit and retain a wide mix of staff. It is many, many years to look back on!
When WISTA was established in the early 1980s, it was clear that there were not many women in the industry and what we found was that they tended to be young and fairly junior in office-based positions. They did not have networks to learn from and lean on. WISTA was established to help women in the industry network and learn from each other.
From a group of five in 1981, WISTA now has more than 3,000 female professionals from all sectors of the maritime industry globally.
What is the importance of STEM education for women for a brighter future for the petrochemicals industry?
Only 22% of the global workforce in chemicals are women; in many areas it is obviously much lower, while in Asia the percentages are higher. Surprisingly perhaps, in the European and US markets, the average is less than 20%. Part of this problem is a lower number of women compared to men choosing STEM higher education in many countries. Additionally, many women who graduate in STEM do not choose the petrochemical industry for employment. If they do, often after maternity leave, they do not come back and join other industries.
This is a problem on many levels for our industry. It limits our access to some of the brightest young talent across the board since we do not see their CVs. This limits the recruitment process and possibilities. It also affects the diversity further up the management chain. No company wants to exclude 50% of the potential candidates, or even 30%-40% which is more typical. Diversity in companies from the entry level to the board room has been shown to lead to better outcomes.
Bloomberg has an index where only companies that are deemed to be truly diverse can be part of the index. This index since its inception has outperformed the other market trackers on profitability and shareholder value. Women in the workplace at all levels are part of that diversity and employing more women can lead to a virtuous circle whereby more women and other diverse groups are attracted and apply to companies once they perceive the company as diverse in its staffing.
Integra is a gender, and in fact diversity, blind company. We want to have the best persons for the job. However, 51% of the workforce are females from senior management and board level. Age, race and religion are also very diverse factors across our company. It has been this way for almost all of its 30 years and so we have benefitted from that position over the years, and are considered to be an attractive company to join. The same applies for the other group companies, including ship owning where there is a very diverse workforce (even at sea where one of our tanker captains is a young Korean lady).
Across the various committees in GPCA, we were very happy to introduce the ‘Leaders of Tomorrow’ programme in 2018 which helps in building local human capital in the region, promoting STEM, and bridging the gap between academia and industry. It is considered as the first official collective step, where industry stakeholders collaborate in shaping skills and preparing the future industry leaders for a career in the chemicals sector.
What is the role/position of Integra in Asia relative to the global trade flows in petrochemicals and how the escalating trade barriers have impacted your business particularly in the Middle East?
We have been very fortunate being so embedded in Asia. We have been able to diversify and reinvent ourselves, indenting ourselves further into the Asian market. We have been successful in China across the years, but this market is becoming more and more diversified and complicated. It needs a deep understanding of the various markets in Asia to ensure that the right product can be placed into the right markets, especially in today’s difficult trade situation. Asia is not one, but many markets, linked but in many senses, each is a little unique.
We have been successful in increasing our coverage to be able to cope with the additional material pointing so far into Asia and we are now seeing that exports from Asia and particularly China and India are growing also into the region, and also beginning to look further afield.
The trade barriers does make things less efficient logistically, which is not good for cost across the chain. In some senses, it increases the major companies’ need for a company like Integra because of the added complexity and the global nature of the solutions. The risk is that this hurts everybody – from the end consumer, to the shipping companies, to our customers – because of the inefficiencies and level of systemic stress it causes, as well as the fluctuations in pricing due to traders having to find tailor-made solutions to the oil majors’ individual solutions.
Countries in the Middle East are finding that they have issues also, where due to tariffs they are disadvantaged in placing their products and cannot be competitive. Since the Middle East has traditionally been a little reluctant to get involved in trade issues, the market getting harder has begun to focus attention in the area of tariff barriers. Indonesia is an example where some products from the Middle East have duties applied since there is no free trade agreement between the GCC and Indonesia. However, there are free trade agreements between Indonesia and many other producing countries. This gives the GCC a disadvantage, for example, in polyolefin sales.
In other areas such as LPG and feedstock gases, the GCC may have been one of the winners since its product is attractive and often carries a premium versus US product, particularly into China. However, at the same time, it puts pressure on GCC products into the western markets due to competition from the USA. So, it is not straightforward at all, and in the end, nobody is winning.
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