A novel approach by INEOS Oxide enabled the business to not only make money from waste, but also helped to create a successful business for two other companies, and remove the equivalent of 60,000 cars from the road.
The ball started rolling when INEOS initiated a search for companies with a possible interest in CO2 being created by its ethylene oxide plant in Belgium.
“We make quite a lot of CO2, we knew that there must be good use that this could be put to but it was not our market,” said Hans Casier, CEO of INEOS Oxide, which already operated the most energy-efficient ethylene oxide unit in Europe.
Rather than release this CO2 directly into the atmosphere, INEOS Oxide set out to find two companies which, together, could run a successful business, using the CO2 to make such things as soft, fizzy drinks and dry ice, which keeps food and drink fresh when it is transported from warehouses to shops.
INEOS introduced Messer to Strombeek IJsfabriek, who went on to form a joint venture, running their new business, BECO2, from INEOS’ Zwijndrecht site in Antwerp.
“We convinced them to build their own company instead of buying their CO2 from someone else,” said Hans.
“They now take about 150,000 tons of CO2 and we share our costs and infrastructure.”
At the press launch of the CO2 liquefaction unit, CO2 was taken straight from the ethylene oxide unit and made into sparkling water. “Everybody from the plant, who was there, stepped forward and grabbed a glass,” said Hans. “We offered it to the press and they all took a step backwards. It was a typical example of the wider community not knowing what chemicals are all about.”
Pinpointing niche markets:
You would not necessarily think that the Turkish construction industry would be the most obvious market to look to when developing a new, high performance insulation material, but it was for INEOS Styrenics.
“The Turkish economy has been growing strongly in recent years and government building regulations have tightened following disastrous earthquakes in 1999 and 2011 in which many buildings collapsed,” said Rob Ingram, Chief Operating Officer at INEOS Styrenics. “There was a lot of building work going on and insulation became increasingly important as standards increased.”
Expandable Polystyrene (EPS) in the form of white foam blocks is a leading material used for building insulation in Europe and was already widely used in Turkey. What was new for the Turkish market was a grey version of this material in which the thermal insulation properties are improved by 20%.
INEOS had three options: battle for a bigger share of the developing grey EPS market in Germany, where people already recognised the benefits and where there is a strong local producer; wait for the rest of Europe to catch-on and follow the German lead; or look for alternative markets and try to capture a first mover advantage.
INEOS Styrenics chose the third option.
It worked with one of its key customers in Turkey and sold the benefits of its EPS Silver product to them. Together they saw an opportunity to be the first to introduce Turkey to this new material. They launched a joint promotion at a major national construction exhibition, spoke to architects and construction companies about the product’s benefits, hosted industry seminars, and wrote a series of articles for the national trade press.
“It was not an overnight success but in five years we have grown sales from nothing to become the market leader,” said Rob. “And that is all because we saw the opportunity and got into the market early to establish our product as the standard for high quality.”
Living what you believe.
Having faith in a plan is as critical as the plan itself.
At INEOS Europe AG that belief saved its Sarralbe PP, a small polypropylene production site in France which had been losing about four million Euros every year.
In 2012, Xavier Cros, Polymers Business Manager at INEOS O&P South, took over the site and implemented a detailed plan that, in the past, had failed miserably.
“None of the actions were really new or breakthrough,” he said. “The difference was that this time the people on site believed the changes would work.”
He addressed the entire workforce and each was given a target.
“Every person at the site became part of the plan, so it was down to everyone whether it succeeded or failed,” said Xavier.
The plan worked. Within a year, the site was back in profit. “That success has breathed new life into the site,” he said. “Everyone now believes we can do even better this year.”
Methoxypolyethyleenglycol (MPEG) had been used for almost half a century when INEOS was founded in 1998.
It was a tried and tested molecule, but it had very few uses.
Shortly after INEOS bought the former BP petrochemical site in Antwerp, it began looking at changing the make-up of many chemicals to make them work harder for the company, add value and give customers better products.
MPEG was one of them. But before INEOS changed it, a team went into the market place to find out what construction companies wanted and needed.
“By changing the specification and working with the core companies, we introduced a whole new technology in that sector,” said Hans Casier, CEO of INEOS Oxide. “A good example is for fast-setting concrete. We provided the solution by changing the way we produced the molecule to meet the needs of this application and we saw a huge increase in sales and contribution.”
Leadership demands courage.
Two years ago INEOS was buying catalysts and selling them on to their customers. Today they make their own and sell about 500 tons a year thanks to a bold decision to build a catalyst manufacturing plant in India.
“If we had built this plant in Europe or America, it would have cost us four times as much,” said Peter Williams, CEO at INEOS Technologies.
Working in partnership with a local company, INEOS now makes catalysts at its own plant and then ships them to customers around the world.
“We did take a calculated risk, but it’s a very competitive business, it’s important to us and we could not have afforded to build a plant at one of INEOS’ existing sites,” he said.
The catalyst manufacturing plant has been so successful that a second one is currently being built.
A willingness to take risks:
A willingness to take calculated risks also shows true entrepreneurship at work.
CEO Peter Williams said his team at INEOS Technologies showed that in trying to win over a customer in Mexico.
INEOS was on the verge of licensing its technology for a polymer plant to a company in Mexico but the customer was concerned that this was the first time INEOS had made one of the products it had planned to manufacture on a commercial scale.
“We knew it was possible from the work we had done in our laboratory, and we were confident in our capabilities,” said Peter.
To convince the customer, INEOS used a pilot plant to manufacture the product and then shipped it to Japan where it was converted into what the customer wanted – packaging. INEOS then sent a team to Mexico to test the packaging on the market.
“We made only two batches of the product and it hit the spot,” said Peter. “We won the business and the relationship with the customer goes from strength to strength.”
Thinking outside the box:
Thinking outside the box can save millions, as INEOS Phenol discovered when it planned to make available land it was not using and offer use of its jetty to a neighbouring company in Antwerp, Belgium.
The deal is a great example of a win-win situation with both parties gaining from the overall project. ADPO will be able to use the INEOS jetty, (a critical facility for a logistics and chemical storage company based in a major port), and INEOS will now benefit from the use of new railway sidings, pipelines and loading facilities which ADPO plan to build right next door to INEOS’ site.
“The main line railway runs right past our site and they are going to be building sidings off that, which will mean our phenol and acetone can be loaded on to trains instead of going by road,” said Nick Williamson, business development manager for INEOS Phenol. “Just putting in a kilometre or so of sidings is costing millions of Euros. We would never have been able to justify the investment on our own but in approaching this issue with ADPO we have both gained from the project. By looking at what we have differently, we have been able to deliver value for our business.”
In addition ADPO also plans to extend the jetty substantially which will mean INEOS can bring in larger shipments of raw materials and export more. “This is an important development for the business which will open up further opportunities in the future,” said Nick.