Four industry masterclasses were the highlight of day zero
For the first time since its launch, the forum featured exclusive industry masterclasses on hot topics such as gender diversity, trade, cyber security and digitalization
Digitalization in the chemical industry
Digitalization will unlock significant impact in the chemical and petroleum industries, said experts at the day zero masterclass dedicated to this important topic. In this masterclass, Anders Brun, Partner, McKinsey & Co, highlighted the four key enablers for digital innovation: 1) advanced analytics; 2) robotics and automation; 3) process digitalization; and 4) connectivity and sending, all of which will be enabled through the digital organization and IT infrastructure.
Frithjof Netzer, Chief Digital Officer, BASF, and Thorsten Wenzel, VP and Global Head of Chemicals, SAP, who also took part in the masterclass, provided practical examples of how digitalization is transforming their businesses and highlighted the opportunities they have observed in introducing the new technologies. They also reflected on the challenges posed both internally, within their own organizations, and, most importantly, in working with clients.
The session featured a presentation from McKinsey & Co showcasing the results of a survey conducted with GPCA members earlier in the year; three use cases were identified – in strategy, manufacturing and sales – where digital is making a big difference.
Women in the chemical industry
The drive to ensure more women enter and stay in the chemical industry is an important one and needs to be pursued if companies are to succeed in the future, argued participants in the Women in the Chemical Industry masterclass on Monday. Introducing the well-attended session, Lyn Tatum of IHS Markit noted that the “low proportion of female employees present a risk companies and that more diverse companies do better.”
The all-female panel agreed that important steps towards increasing gender diversity include setting of targets for female participation at senior levels, the use of mentoring, making it comfortable for women to work on production sites, and addressing familial prejudices that see women dissuaded from working in the industry by parents and husbands.
Fateema Al-Nuami, CEO of ADNOC LNG and head of the ADNOC gender balance committee, said that her company had recognized that it needed to make sure there were no obstacles on peoples’ minds for women to progress and reach their full potential. Abeer Al-Omar, Senior Executive for Corporate Affairs and Government Relations at EQUATE, added that there were a number of challenges to overcome, notably that many women, although educated in science and engineering, do not feel that the chemical industry environment is fit for them.
Also taking part in the masterclass were Nathalie Brunelle, SVP Corporate Affairs Total Refining and Chemicals, and Gina Fyffe, Executive Director of Integra. Brunelle noted that mentoring is highly encouraged within Total, to help women become more confident and share experiences. Fyffe added that diversity does lead to better outcomes and that employing more women can lead to a virtuous circle whereby more women apply for posts once they perceive the company is gender balanced.
Cyber security in the chemical industry
Cyber attack is a growing issue for chemical companies and the risk must be managed on a business basis and not just as an IT challenge, those attending the Monday masterclass on Cyber Security in the Chemical Industry, learned. Companies can expect to have their IT and operating technology (OT) systems compromised and must ensure they have plans in place to address the impacts on business if the cyber attack disrupts production or the ability to do business.
Murhaf Al-Madani, VP Global Information Technology and CIO at SABIC, advised that companies must take a broad strategic approach to combating cyber attacks, not just a tactical one. Khalid Harbi, Chief Information Security Officer at Saudi Aramco, added that “Companies are more exposed here and must take an holistic/strategic approach to reduce risk.”
Dan Caban of FireEye, explained that most cyber attacks are being made by national states, looking for data and intellectual property theft rather than for financial ransoms. Once an attack is successful, it can remain undetected for a long time, with huge amounts of data being accessed.
All three panelists stressed the need to educate the workforce to look out for and report phishing emails, which are still the main form of attack – accounting for over 90% of cyber breaches. Companies, they concluded, should expect attacks and not be in denial of the problem. They need to assess the business risks and execute plans to mitigate the “catastrophic damage” that could be caused.
The global chemical industry in an era of protectionism
Growing market protectionism represents significant emerging threats to the current trading arrangements for chemicals, industry leaders told delegates during this masterclass on day zero.
The panelists comprising Ahmad Al-Saleh, Global Business Director, Ethylene Glycol, EQUATE and Vice Chairman, International Trade Committee, GPCA, Paul Harnick, Global Head of Chemicals and Performance Technologies, KPMG, René van Sloten, Executive Director, Industrial Policy, European Chemical Industry Council, and Michael Walls, VP, Regulatory and Technical Affairs, American Chemistry Council, explained how companies and national industries can prepare for a more protectionist political environment without sacrificing the gains that globalization has brought to the industry in the past 20 years.
“Any major disruption will obviously impact demand and the [chemicals industry] has to be very careful,” Al Saleh said. “I would like to be optimistic but the indicators are going in the wrong way … We are already seeing deteriorating capacity utilization globally and temporary demand destruction,” he added. What we’ve seen is “only see of the tip of the iceberg with the impact on margins, demand, and curtailment of investments,” he warned. “We are going to see financial-related impact which will be more structural.”
Moreover, the imposition of tariffs will have a longer-term effect on innovation and competitiveness of the industry, said Rene Van Sloten. Societal concerns about the environment also adds further barriers to trade, Van Sloten added.
For his part, Michael Walls, observed that trade war will bring stagflation, demand destruction and oversupply; it will also have a significant impact on innovation.
“We are innovators of the chemical industry because of the global market. I think for us in chemicals, we are in an ideal position to demonstrate what the benefits of global trade are. It provides many of the answers that protectionism creates, such as unemployment, etc.” he concluded.
