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Intercontinental, Frankfurt

Panoramic suites offer striking city views of the Main River at this elegant, modern Frankfurt hotel. Savour the finest modern German cuisine at our Signatures Restaurant and discover the contrasts that define the city right next to the hotel: towering skyscrapers and the global financial centre are just minutes from the historic Old Town and shopping districts. The ideal business venue, this Frankfurt hotel features 19 meeting rooms and a purpose-built conference centre with 360º views.

The World Refining Association has negotiated special prices for the Global Petrochemical attendees.   >> Reserve your hotel room now

In a market where growth is a must, the 10^th annual GPC will provide a platform where Petrochemical Producers can learn how to promote growth in local markets by reducing margins, increasing flexibility and developing business relationships to ultimately stay competitive. With this current economic climate, and the world competing for lower market feedstock’s and energy efficient processes, this conference will be the perfect meeting for companies to understand how to reduce costs through technology and innovation.

The event is therefore specifically targeted to Petrochemical Producers looking to achieve growth as well as project management consultants / EPCs, catalysts, financial institutions and solution providers.

Confirm your place at Global Petrochemcials Conference 2013

For more information please contact:

Hannah Wharrier
Portfolio Director, World Refining Association
Tel: +44 (0) 207 384 8030
Email: Hannah.Wharrier@clarionevents.com

* This event is subject to German VAT. An additional 19% will be charged when booking

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For team packages please contact:
Malin Mostofi, Marketing Manager, The World Refining Association

Email: malin.mostofi@clarionevents.com

	Daniele Ferrari Chief Executive Officer Versalis

You are presenting the keynote session at the Global Petrochemical Conference 2013 on how to boost competitiveness of the European market. How are European petrochemical producers staying competitive?

The innovation debate that is widely gaining ground in every sector proves that industry is urged to break the deadlock of a sluggish growth in Europe.

Europe remains a pivotal region within the market outlook worldwide, but the chemical industry is considered a “mature” industry there, in particular as far as commodities are concerned. The industry, in fact, is facing a market scenario affected by high energy costs, debt crisis, the decline in consumption and, above all, major competition (feedstock)  from the Middle East and Asia and by the aggressive challenge of international players that are developing in growth contexts. In addition, demands are increasing from the green economy.

These are factors that urge to action and transformation in order to strengthen for the future. Therefore, innovation needs to add up to renovation.

We shall now have to acknowledge the changes the world is going through (mostly concerning energy saving, climate and resources, demography and distribution of wealth, society) and direct the industry, where it can boast leadership and value, towards new strategies, innovation, high-added value products and efficiency.

The European petrochemical producers are responding to all these challenges by seizing, for instance, the great opportunities that bioeconomy is offering and by gaining a footprint in the dominant marketplaces in Asia, ME, India, and Latina America. Expansion overseas is also a great opportunity to make the most of intellectual property and maintain domestic production at sustainable levels beyond taking the advantages that joining forces with new partners brings along.

Intellectual property is also central to the competitiveness of the chemical industry. It is essential to its long-term sustainability and a valuable asset basis to bring new products to consumers.

All this will allow Europe to recover, although not immediately, by improving in exports and thus achieve stability, at least.

What strengths should Europe play with?

Europe is still one of the most important trading regions (which include Asia and NAFTA). In terms of sales, it has lost top ranking to China and chemicals sales in Asia are more than double that of Europe.

However, the European chemical industry continues to maintain global leadership in terms of proprietary technologies, highly-skilled workforce, high-performance products.

We have the means and the ability to follow the market trends which have disruptive effects on our reference sectors. Our plans for product and technologies development, then, ought to be implemented based on those trends.

Our Research is working within that scope and it could not be different as technological innovation is one of the features that will keep Europe afloat in terms of competitiveness.

What excites you about this industry?

It is worth noting that the chemical industry is also instrumental in the development of many other types of industries; by its very nature, this industry is able to evolve and must be able to continuously invest in development and innovation.

Innovation is only one of the main traits of this industry. Its scope of action impacts on the cultural, social and economic development of a country and progresses within an extremely dynamic and vibrant environment.

The chemical industry is instrumental to human development in general, and while doing that, it spurs to improve with challenges. Enduring evolution could sound a suitable expression to describe the feature I like about this industry. 

Any exciting project news from VERSALIS that you can share with us?

Versalis is a game changer. In 2012 we embarked on a 4-year totally new strategic plan that will transform the company and strengthen its position for the future.

The plan is based on 4 main pillars that include increase of efficiency, diversification of the product portfolio, expansion overseas and innovation.

Investment through to 2015/2016 will total € 2bn which adds up to €500ml invested in the Matrìca joint venture for the Porto Torres green industrial complex.

Versalis has always been a reliable and major player both in the Italian industry and at an international level.

With the emergence of a new economic development, the Bioeconomy model, our company could not but make its own contribution and entered the innovative “green chemistry” business.

The strategy has allowed us to move in time and work with partners of international standing: in June 2011 the joint venture Matrìca was formed with Novamont, a world leader in the market for biodegradable plastics with the aim to construct the world's largest green chemistry hub for the production of chemicals (bio-intermediates, bio-lubricants, bio-additives and bio-plastics) from raw materials of plant origin, and also to create synergies with some of the conventional production chains.

The project has been under way for some time now: a research centre has been operating for a year and the Phase 1 plants, now under construction, will be set for production end of 2013.

The elastomers business is strategic to Versalis. Our investment plan includes projects to upgrade existing production lines, research and the development of proprietary technologies to tackle a market that in coming years is expected not only to expand, but that will also require specific features on products.  At the same time, we have invested in innovation and big projects in the green sphere, attempting to anticipate market trends with highly innovative products that will enrich the already wide commercial range and make our company more competitive at international level.

Versalis aims to be the first chemical company to produce butadiene from renewable sources on an industrial scale, with significant competitive advantages and reduced environmental impact. Hence the partnership with Genomatica in 2012.

In February 2013 we also signed an agreement with Yulex, a US-based developer of agricultural-based biomaterials for the production of natural rubber from guayule, destined for consumer, medical and industrial applications. Plans also include the construction of a industrial production complex in Southern Europe. The agreement represents an additional business opportunity and allows us to bring to market a diversified commercial offer that will strengthen our ability to compete globally. Versalis has also recently partnered with Pirelli for a joint research project aimed at the use of guayule-based natural rubber in tire production All of this as far as our green engagement is concerned.

From the petrochemical front, Versalis has joined forces with major producers Petronas and Honam Petrochemical (now Lotte Chemical) to gain a production footprint in Asia and has consolidated a commercial presence through the Shanghai offices.

What do you see happening in the next 5 years?

The industry outlook is rapidly and profoundly changing. It is not an easy task to make forecasts over a 5 years lapse today as too many variables are to be considered. But we can avail ourselves of the indicators that we have been learning to read to put the industry on the right track. In a 5-year’s time what will be changed is the way we conceive industry, in Europe, in particular.

Considering the global scenario, we need to rethink industry in terms of size, competitiveness, integration and regional development, focusing on innovation and training, with an eye on the so-called megatrends at the global level. The right philosophy is to act local and think global, constantly bearing in mind the basic principles of economic, environmental and social sustainability.

What makes the Global Petrochemical Conference a good platform to discuss these topics?

The Global Petrochemical Conference is a meeting place for the global petrochemical industry. It is certainly an ideal platform where the industry leaders can share experiences and ideas that help outline what the development and future of the industry will be like. Versalis is keen on contributing to shape that future, by being part of it at the same time.

	Mr. Anil Chandramani Chief Investment Officer & Global Sector Lead Chemicals & Fertilizers International Finance Corporation

You are presenting a round table session at the Global Petrochemical Conference 2013 on investment opportunities in emerging markets. Where do you currently see the biggest investment opportunities?

The Chemical industry invests several hundred billion dollars each year all over the world,  with most of those investments in locations that are either close to raw material and feedstock or close to markets. For instance, over the last two decades China and the Middle East have been the favoured destinations for new investments, the former because it is a huge market and the latter because it has access to cheap feedstock. In recent years, we have seen many proposals for large investments in the US because of the expanded availability of shale gas in the US. This is just one example of investments following feedstock and markets.

China has started exploring shale gas aggressively.  It is quite likely that in 5-10 years time frame, China will start producing a lot of shale gas too.  While some of the dry gas is likely to go towards power generation, NGL and the rest of the gas are also likely to lead to investments in the petrochemicals industry. Investments in India will continue to expand because it is a large and growing market.

There have been significant discoveries of gas in East Africa, which means countries such as Mozambique and others in that region are likely to attract significant investments in LNG, fertilizers and petrochemicals. 

If European countries get comfortable with shale gas then countries such as Poland can attract investments as well. I think the shale gas industry is very likely to improve its environmental standards, reduce water usage and become more environmentally friendly.  Perhaps it is not happening as fast as we would like, however I am convinced that improvements will come over time.

All these new investments will bring down costs, create competition and lead to the usual tug of war between entrenched producers and new ones that bring in the state of the art, resource-efficient technologies. In my view, the outlook for the industry is bright and exciting.

How do European petrochemical producers benefit by investing in these regions?

There is an old saying that you must apply even if you just want to stay in the same place.  That is quite true in the Petrochemical industry today. When new investments come in with newer technologies and larger economies of scale, the competitive landscape changes.  If existing producers want to maintain their market leadership and if they do not want to cede their position at the forefront, they must decide how to fight. 

There are many different strategies they could adopt: modernize existing plants in Europe or make new investments where you can find an advantage: either cheap feedstock or proximity to markets. European producers will also invest in order to retain their market positions. These are the markets where growth in demand is going to come from, which means that European producers, like others, can ignore them only at their own peril.

The problem for many established players who have dominant positions in the developed world is that they are not familiar with these new emerging markets as they are with their home markets. Their tendency might be to hunker down and focus even more on their home markets.  However, that would be a short sighted strategy because demand in these markets is not growing as fast. They must try to acquire the knowledge and human resources that are needed for them to be successful in new markets.  They must seek "partners" (in a broad sense not just joint venture partners) who can help these European leaders increase their levels of comfort in the newer markets. That is where a partner like IFC can help.

IFC has always been focused exclusively on emerging markets.  IFC's Board of Governors includes 184 Finance Ministers. For most countries that a European producer might consider, the Finance Minister of that country knows IFC and IFC knows them. We can provide long tenor financing, which is helpful because the size of new investments is increasing in an effort to get greater economies of scale. IFC can provide financing in hard currencies and in many local currencies. We can provide equity and debt and any other instrument in between as appropriate. IFC is a AAA-rated partner that can help European companies manage risks so they remain competitive even in a changing environment.

What challenges do producers face when investing?

Political risks in unfamiliar markets is the first risk they face.  Each of these markets has a different culture and success factors are varied. China works very differently from India, which in turn is very different from Brazil. Political and cultural savoir-faire is what they need to acquire.  If they are serious, they will get the right skills to lead their efforts in these markets.

Another challenge they face is financing: If they don't have local banking relationships, they might not know the local stock markets. They tend to raise all their financing back home and fund the local subsidiaries. That is acceptable in the short term but if in the long term they do not cut the umbilical cord, the subsidiaries will not be able to stand on their own feet. During the Euro-zone crisis over the last few years, European banks have been forced to retrench assets and cut exposures considered more risky. Medium sized European companies operating in the emerging markets have been hit with a double whammy.  The way to tackle that, in the interest on building long term leadership, is to let the subsidiaries become self-sufficient.

Another challenge some companies face is with regards to environmental standards and competition with local players. They have to adjust to a different kind of competition. That means understanding the market, segmenting it and then deciding which segments they have a competitive advantage in catering to.  It is not the same landscape. Things they take for granted in their home countries, in developed countries,  may be variables in emerging markets.

These and other challenges of working and succeeding in emerging markets is what I would like to discuss in my presentation.

What do you see happening in the next 5 years across the globe?

We see global economies continuing to grow. In addition, population and per capita GDP will continue to grow in the medium term. Thus demand for chemicals is going to continue to grow. Of course there will be re-balancing. Demand for some chemicals in the developed countries will go down but it will rise in emerging markets.  The centre of gravity of the global economy will continue to shift.

Another big challenge we will have to face more spiritedly is the one of climate change. I think sceptics are slowly dwindling. In another generation, the dynamics will be quite different. I am aware that a generation is a long time but that is a different issue. We expect that people around the world will start to become more conscious of sustainability in their daily lives. That too will impact demand for different kinds of chemicals – i.e. reduce demand for some products and increase demand for others. Companies must remain vigilant to changing trends. Those who anticipate better than others will have an advantage.

Certain kinds of bio-chemicals are likely to become more popular. Conversion of waste into useful products whether energy or chemicals or other materials will increase. I think it is all very exciting.

What makes the Global Petrochemical Conference a good platform to discuss these topics?

The last two years that I have been at this conference, I have found a very broad spectrum of European Chemical companies and even non-European companies represented here in large numbers. People are in an enquiring mode. Change is all around them. The old order seems to be changing but the new order may not be clear. In this environment, senior executives who attend the GPC are very open minded about discussing what this means for them and where they should go from here. European executives are in an exploring mode. So I find interactions at the GPC very stimulating. There are always many interesting and diverse personalities to meet and I look forward to some fun and learning through exchange of ideas.

	Mr. Aman Amanpour President AmanpourConsult former President Shell Chemicals Middle East

What do you think currently are the main challenges to the global petrochemical industry?

The current state of global and regional geopolitical-socio-economic boundary conditions is the first factor to be mentioned. In this dynamic and complex context some key industry specific game-changing challenges are in hard play such as: new feedstock sources (shale, clean-coal, bio-based), novel technologies (XTL, MTO/MTP, novel catalysis and bio/genetics innovations...), leading to impact on the old and emerging of new players, the resultant new investment / divestment / M&A waves and the reshufflings in the supply/demand, cost curves and hence leading to some significant leader-laggard and regional power shifts.

How can petrochemical producers increase efficiency across the value chain?

First by acknowledging the emerging trends and challenges such as those mentioned above. Then focusing on their true strengths and competitive edge. Some current initiatives such as fit-for-purpose alliances, continuous urge for cutting unproductive cost while enhancing the investment in human talent and innovation will bring efficiency, but also will intensify the competition and the battle for the ‘survival of the fittest’.

What excites you about this industry?

This 4 trillion dollar industry provides the backbone for today’s and tomorrow’s progress, including, when directed properly, in the service of social justice, protection of environment – in addition to the required profitability for the players and economic prosperity for the communities. No industry and other aspects of modern human life could prosper without continuous progress and innovation in chemistry and its related industries.

What do you see happening in the next 5 years?

Maturation and commercialization of some exciting new ways of making existing molecules, as well as creating new products and solutions based on modified and new platforms – for current and new end-uses. North American Petrochemicals will solidify its current (re)gaining ground on the back of Shale while Middle East and Asia remain and further expand as significant gravity centres. There could also be an emergence of Russian and South American players. All these could be positive and exciting within a healthy global context, but less so if the current external risks and challenges won’t be addressed.

What does European companies need to do to stay competitive?

Our industry has its key origins and major evolutions in this continent. Europe is still spearheading some vital R&D and innovations, especially in performance / specialty chemicals and advance materials. Here is where its edge and future lays relying on the strong industrial culture / tradition as well as some integrated producing and consuming hubs and clusters . A deliberate focus on downstream chemicals with actual and/or virtual integration with upstream/intermediate operations in lower cost regions would be a key element. On this way, some upcoming, at times painful, restructurings are inevitable.

What will be your message at the Global Petrochemical Conference?

I will do my best to dissect some of the earlier mentioned trends and their consequences – mainly from the perspective of the topic I will present.

Press release: 14 May 2013

The European petrochemical industry must continue to capitalize on innovation Chevron Phillips Executive says

Global Petrochemicals Conference to be the ideal platform for global petrochemical producers to meet and discuss the changing industry conditions worldwide

(Download press release in PDF)

“Development of energy sources around the world drives the availability of petrochemical feedstocks, and for most of the past two decades, much of that development has been in the Middle East leading to a surge in petrochemical production in that region,” says Benny Mermans, Europe and Africa Region General Manager at Chevron Philips Chemicals International N.V.(Chevron Phillips Chemical) “The European petrochemical industry must continue to capitalize on its historic advantage in innovation and further work on developing its specialty products portfolio. This is even more important in light of the prolonged economic crisis which continues to impact demand and margins in much of Europe… European producers could also benefit through the development of Europe’s oil and shale gas resources which could provide access to more competitive supplies of feedstock.”

Mr. Mermans will be presenting a session at the Global Petrochemical Conference 2013, in Frankfurt 11-13 June 2013, on increasing flexibility in a changing feedstock environment. Petrochemical producers from over 25 countries around the globe will be attending the event next month and it will therefore become an important platform to discuss the changing industry conditions worldwide.  

Challenges in gaining access to cheaper feedstock

Mr. Mermans says challenges that must be overcome to fully develop these resources include land access, regulatory hurdles, infrastructure development, and continued development of drilling and completion technologies. Mr. Mermans continues, “To get access to competitive feedstock within its borders, European producers must encourage development of European energy resources, creating an environment of plentiful gas supply. This would take substantial cooperation and development.”

Development over the next 5 years

Mr. Mermans believes that demand growth for petrochemicals and plastics will continue to exceed global GNP growth thanks to continued substitution and increasing per-capita consumption in the developing world.  “We estimate that global demand growth for ethylene over the next ten years could support the equivalent of 3-4 new world-scale crackers per year,” he continues. “We believe the development of shale energy resources around the world will also catalyze new investments in petrochemicals and plastics… Satisfying global demand growth will require continued high investment in petrochemicals and plastics globally.”

Hear more from Benny Mermans, Chevron Philips Chemical, and many other experts in the industry at the 10^th annual Global Petrochemicals Conference, 11-13 June 2013 in Frankfurt Germany.

For more information, interviews and media accreditation:
Marketing Manager: Malin Mostofi
Email: malinmostofi@gmail.com