CEO’s Round Ta­ble

Man­ag­ing Di­rec­tor, Cove­stro (In­dia) Pri­vate Lim­ited

Chemical Industry Digest - - What’s In? -

Chem­i­cal In­dus­try Digest posed a set of seven ques­tions to CEOs of a few lead­ing com­pa­nies to know what their un­der­stand­ing of sus­tain­abil­ity is and how they are go­ing about their ac­tiv­i­ties to­wards sus­tain­abil­ity. Their views are pre­sented here.

Chem­i­cal In­dus­try Digest (CID): Sus­tain­abil­ity means many things to many peo­ple. It could be re­source ef­fi­ciency, avoid­ing or min­i­miz­ing bad ef­fects on the en­vi­ron­ment of any ma­te­rial or prod­uct or emis­sions from man­u­fac­tur­ing pro­cesses. Some link it with CSR ac­tiv­i­ties too. Can we get some clar­ity on this along with what the bench­marks are if any for sus­tain­able man­u­fac­tur­ing in the chem­i­cal in­dus­try?

Ajay Dur­rani (AD): Sus­tain­abil­ity is a highly com­plex mat­ter as it touches on the over­all in­tegrity & con­struct of our planet and its eco-sys­tem, our so­ci­ety and the way we cre­ate pros­per­ity in all its var­i­ous forms. This is why Cove­stro’s ap­proach to sus­tain­able de­vel­op­ment is based on the triple-bot­tom line prin­ci­ple to serve “peo­ple, planet, profit”: With ev­ery­thing we do we aim to de­liver a pos­i­tive im­pact on at least two of those three di­men­sions while not harm­ing the other.

We al­ways bear this ba­sis for our de­ci­sion mak­ing in mind. We are com­mit­ted to foster in­creased value on the eco­nomic, en­vi­ron­men­tal, and so­cial lev­els, all at the same time and are a strong ad­vo­cate for the United Na­tions Sus­tain­able De­vel­op­ment Goals.

Ajay Dur­rani is Man­ag­ing Di­rec­tor & CEO of Cove­stro (In­dia) Pri­vate Lim­ited (for­merly known as Bayer Ma­te­ri­alS­cience Pvt. Ltd). In this role, he is re­spon­si­ble for lead­ing the de­vel­op­ment and ex­pan­sion of Cove­stro’s busi­ness across the In­dian sub con­ti­nent.

Dur­rani has over 21 years of ex­pe­ri­ence in the chem­i­cal in­dus­try with a fo­cus on achiev­ing con­tin­u­ous and im­proved busi­ness per­for­mance. He has a mas­ter’s de­gree in Mar­ket­ing Man­age­ment from Ji­waji Univer­sity, Gwalior with pro­fes­sional qual­i­fi­ca­tions from Bos­ton School of Busi­ness in Switzer­land, INSEAD Sin­ga­pore and In­dian School of Busi­ness in Hy­der­abad. Busi­ness ac­tiv­i­ties of Cove­stro In­dia are in poly­mer prod­ucts, such as polyurethanes, poly­car­bon­ates and coat­ings, ad­he­sives and Spe­cial­ties.

We be­lieve in ex­tend­ing this mis­sion of sus­tain­able growth to the last mile of our value chain.

Thus, it’s our com­mit­ment to make 100 per­cent of our sup­pli­ers com­pli­ant with our sus­tain­abil­ity re­quire­ments. We also aim to re­duce our spe­cific green­house gas emis­sions – those gen­er­ated per met­ric ton of prod­uct pro­duced – by 50 per­cent when com­pared to our base year 2005.

CID: Many ma­te­ri­als/prod­ucts that are be­ing used now are not sat­is­fy­ing the sus­tain­abil­ity cri­te­ria. What should com­pa­nies do to green ex­ist­ing prod­ucts or re­place them to­tally with more benign and en­vi­ron­men­tally friendly ma­te­ri­als/prod­ucts? Should com­pa­nies re­visit their ex­ist­ing prod­uct port­fo­lios and even their man­u­fac­tur­ing pro­cesses to re­ori­ent them to­wards sus­tain­abil­ity re­quire­ments? What

do you prac­tice?

AD: Cove­stro is con­stantly push­ing bound­aries to in­crease the share of al­ter­na­tive re­sources in the pro­duc­tion of its plas­tics – but only if this re­ally does help the en­vi­ron­ment. Should the process re­quire ad­di­tional en­ergy, or should the pro­duc­tion or trans­port of the al­ter­na­tive re­sources re­lease more CO than the ap­pli

2 cation saves, our com­pany will de­cide against it.

As men­tioned we have re­placed up to 50% crude oil used in man­u­fac­tur­ing poly­ols with CO . Hard­en­ers

2 for high-per­for­mance coat­ings in the au­to­mo­tive and fur­ni­ture in­dus­try too were tra­di­tion­ally based on fos­sil – and there­fore non-sus­tain­able – raw ma­te­ri­als. We have now coat­ing hard­en­ers based on re­new­able re­sources. From a point of view of man­u­fac­tur­ing polyurethane, iso­cyanate and poly­ols are the two main com­po­nents. There­fore, to make the pro­duc­tion more sus­tain­able Cove­stro adopted the use of gas phase tech­nol­ogy.

CID: The World En­vi­ron­ment Day this year on 5th June had the theme ‘Beat Plas­tic Pol­lu­tion’. As you are aware a large part of the pri­mary ba­sic petro­chem­i­cals is con­verted into plas­tics or poly­mers which are non-biodegrad­able and cre­at­ing mam­moth pol­lu­tion of our seas, rivers and land. Would you agree that from the sus­tain­abil­ity per­spec­tive plas­tics was a ‘bad’ ma­te­rial ab ini­tio and would this also be the in­ad­e­quacy of chem­istry not to have fore­seen the con­se­quences?

AD: The world has pro­duced over nine bil­lion tons of plas­tics since the 1950s. 165 mil­lion tons of it have trashed our ocean, with al­most 9 mil­lion more tons en­ter­ing the oceans each year. Since only about 9 % of plas­tic gets re­cy­cled, much of the rest lies in the en­vi­ron­ment or land­fills. This can­not be wiped out in a jiffy.

I be­lieve we would be do­ing a dis­ser­vice to poly­mers if we only re­strict the dis­cus­sions on the in­ad­e­quacy of the chem­istry or the im­pact on na­ture. More than poly­mers it­self, it is the ap­pli­ca­tion which deter­mines its con­tri­bu­tion. As a mat­ter of fact, there have been sev­eral in­dus­tries where poly­mers con­tinue to play the role of a cat­a­lyst in en­vi­ron­men­tal pro­tec­tion and pro­mote a health­ier life.

That be­ing said, there is no doubt that there is an ur­gent need to in­tro­duce poly­mers which have a lesser en­vi­ron­men­tal im­pact. A case in point is the in­no­va­tion from Cove­stro wherein we have re­placed 20-50% of the crude oil used to man­u­fac­ture poly­ols with car­bon diox­ide. This has a dual im­pact – re­duces the bur-

den on the crude oil as well as uti­lizes the car­bon diox­ide from the en­vi­ron­ment in a con­struc­tive man­ner.

It is also im­por­tant to adopt bio­plas­tics. There have been many chal­lenges to the adop­tion of bio­plas­tics. One of the fore­most be­ing that they are a re­cent in­ven­tion. Any in­no­va­tion re­quires climb­ing through the usual growth tra­jec­tory be­fore gain­ing ac­cep­tance as a mass prod­uct, re­gard­less of the benign na­ture of the ma­te­rial/idea. Sec­ond, ab­sence and lack of strict reg­u­la­tions is a ma­jor im­ped­i­ment to the adop­tion of bio­plas­tics. Third, the in­cre­men­tal ap­pre­ci­a­tion in the cost of uti­liz­ing bio­plas­tics has been a de­ter­rent in mar­kets which are more cost com­pet­i­tive. How­ever, we have been wit­ness­ing this to be a wan­ing trend across sec­tors and economies.

One of our own five sus­tain­abil­ity tar­gets, which we aim to achieve un­til 2025, is to in­vest at least 80 per­cent of our R&D bud­get in projects aligned with the Sus­tain­able De­vel­op­ment Goals (SDGs).

CID: When it comes to the de­vel­op­ment of en­tirely new prod­ucts/ ma­te­ri­als do you em­ploy prin­ci­ples of sus­tain­abil­ity ab ini­tio? Are such prin­ci­ples & prac­tices em­ployed in your R&D? Do you feel the global pub­lic pres­sures to­wards cleaner en­vi­ron­ment & sus­tain­abil­ity would give an im­pe­tus to R&D?

AD: Sus­tain­abil­ity is at the core of all our ef­forts and is our strate­gic vi­sion. We keep an eye on the en­tire prod­uct life­cy­cle. This in­cludes the raw ma­te­ri­als, pro­duc­tion, and pro­cess­ing, as well as the ap­pli­ca­tion, dis­posal or re­cy­cling of our prod­ucts. Sus­tain­abil­ity gov­erns ev­ery­thing we do, and we want to im­prove in each area: from re­search and de­vel­op­ment – in­clud­ing joint projects with our cus­tomers and other part­ners – to sourc­ing, pro­duc­tion and distri­bu­tion.

There is ab­so­lutely no pres­sure on us as we have been at the fore­front of build­ing a brighter to­mor­row through sus­tain­able prac­tices. We are com­mit­ted to the goals and pro­vi­sions set out in the United Na­tions Global Com­pact (UNGC) and have signed the UNGC Char­ter.

Fur­ther­more, one of our own five sus­tain­abil­ity tar­gets, which we aim to achieve un­til 2025, is to in­vest at least 80 per­cent of our R&D bud­get in projects aligned with the Sus­tain­able De­vel­op­ment Goals (SDGs). Thus, sus­tain­abil­ity is an in­te­gral part of our R&D and how our busi­ness moves for­ward.

CID: End of the pipe treat­ment means not good chem­istry; min­i­miz­ing dele­te­ri­ous ef­fect of en­vi­ron­ment is an­other ap­proach; Re­cy­cling & reuse is be­ing adopted in some cases and cra­dle to cra­dle/cir­cu­lar econ­omy are be­ing touted. What would be the most prac­ti­cal ap­proach – in the short term and what is re­quired to be done in the long term?

AD: As I men­tioned ear­lier, sus­tain­abil­ity has to meet the needs of the present with­out com­pro­mis­ing the well-be­ing of fu­ture gen­er­a­tions. To which we need mul­ti­ple ap­proaches that can an­swer both short term and long-term prob­lems. We have al­ready achieved a break­through in this di­rec­tion with our cardyon tech­nol­ogy. The ma­te­rial (polyol) pro­duced us­ing this tech­nol­ogy con­tains 20 per­cent CO and is a pre­cur­sor for foam used in mat

2 tresses and up­hol­stered fur­ni­ture. Cove­stro brought the first in­dus­trial-scale pro­duc­tion plant for this polyol on stream in 2016, and in the fu­ture, we are ex­pect­ing to in­crease the share of CO to up to 40%.

2

We are also work­ing in cross-in­dus­try con­sor­tiums on meth­ods to make car­bon diox­ide and waste flow of other in­dus­trial sec­tors us­able as raw ma­te­ri­als for our prod­ucts.

In or­der to live up to the grow­ing sig­nif­i­cance of cir­cu­lar busi­ness mod­els and the need for the more ef­fi­cient use of re­sources, a cen­tral co­or­di­nat­ing of­fice for the cir­cu­lar econ­omy was im­ple­mented in 2017.

CID: An­other ma­jor prob­lem is that of cli­mate change, global warm­ing due to emis­sions of green­house gases. This can be mit­i­gated by man­u­fac­tur­ing pro­cesses shift­ing to low car­bon or no car­bon load on en­vi­ron­ment. Are R&D ef­forts mov­ing in this di­rec­tion? Can a shift to re­new­able feed­stocks from petro feed­stocks help? In your man­u­fac­tur­ing are you try­ing to re­duce the car­bon load of your pro­cesses?

AD: Shift to re­new­able feed­stock from petro will def­i­nitely help. We need to move to­wards more biobased poly­mers. At Cove­stro, we use in­no­va­tive man­u­fac­tur­ing pro­cesses, such as the oxy­gen de­po­lar­ized cath­ode tech­nique in chlo­rine pro­duc­tion that saves as much as 30% of elec­tric­ity. Sim­i­larly, em­ploy­ing gas phase tech­nol­ogy can also save 40% en­ergy and up to 80% sol­vent us­age in the man­u­fac­ture of the foam com­po­nent TDI (toluene di­iso­cyanate), a pre­cur­sor for flex­i­ble polyurethane foam.

In or­der to in­crease our car­bon pro­duc­tiv­ity we formed the Car­bon Pro­duc­tiv­ity Con­sor­tium with ex­ter­nal part­ners and de­vel­oped a method­ol­ogy that iden­ti­fies nine levers along the value chain that help to make a bet­ter use of fos­sil fuel car­bon as a re­source, to use al­ter­na­tive re­sources and to move to­wards a clos­ed­looped model. This method­ol­ogy is open source as we want to en­cour­age our busi­ness part­ners as well as

Be­tween 2005 and 2016, CO emis­sions in all com­pany lo­ca­tions of Cove­stro de­creased by 12% de­spite the fact that the pro­duc­tion vol­ume in our 17 most im­por­tant lo­ca­tions across the world in­creased by al­most 57%. To­wards the end of 2016, we were al­ready pro­duc­ing 40.9% fewer spe­cific CO2 emis­sions com­pared to the ref­er­ence year 2005.

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other in­dus­tries and pub­lic in­sti­tu­tions to be­come as car­bon pro­duc­tive as pos­si­ble, to over­come the chal­lenge to en­sure our so­ci­ety’s pros­per­ity while miniz­ing, if not re­vers­ing, our neg­a­tive im­pact on the cli­mate.

CID: Can you give some ex­am­ples/ achieve­ments of your com­pany’s ef­forts on the sus­tain­abil­ity front?

AD: Be­tween 2005 and 2016, CO emis­sions in all

2 com­pany lo­ca­tions of Cove­stro de­creased by 12% de­spite the fact that the pro­duc­tion vol­ume in our 17 most im­por­tant lo­ca­tions across the world in­creased by al­most 57%. To­wards the end of 2016, we were al- ready pro­duc­ing 40.9% fewer spe­cific CO emis­sions com­pared

2 to the ref­er­ence year 2005.

With a spe­cific fo­cus on In­dia, we set up the Eco-Com­mer­cial Build­ing as a proof of our com­mit­ment to push bound­aries to­wards a brighter to­mor­row. In the last few years, it has be­come a net pos­i­tive en­ergy build­ing. This means that we gen­er­ate and save more en­ergy than what is con­sumed by the build­ing. Sim­i­larly, we have been work­ing with com­pa­nies, part­ners and NGOs to con­trib­ute to so­cial causes us­ing our so­lu­tions.

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