Having been a chemicals researcher for 20+ years, talk about a notable industry change and some of the things that have remained the same.
One of the key industry changes is that the world is more globalized. When I began my career in chemicals, the industry was still dominated by Europe and North America, and most of the dialogue was around those markets. Japan was restructuring and talk of moving into other regions like the Middle East and Southeast Asia was only just beginning.
In terms of what has remained the same, chemical companies then and now want to have low cost capacity. They are focused on efficiency, reliability, and understanding their customers to differentiate themselves in the marketplace.
Even after spending so much time in the industry, do any trends surprise you?
There are always some surprises. The industry has seen a significant amount of consolidation, with some company names disappearing and bigger, mega players emerging.
Another surprise is the interconnectedness of industries. You were once able to mostly focus on chemicals. Now, there is greater convergence since other industries rely on chemicals and materials innovation to create new products and solutions—electronics miniaturization, packaging for food waste reduction and even 3D printing, for example. So, innovation is more critical than ever, and the “cash cow” mentality of just doing what has always been done because the money was “good enough” is definitely a thing of the past for long term players.
What should chemical companies do to survive and thrive in an increasingly competitive marketplace?
Chemical companies need to focus on what’s ahead. They must pay attention to megatrends—societal, demographic, environmental, regional and technological changes―that give insight into what kinds of chemicals and chemical routes will be needed in the coming years. This will help them make well-informed bets on the future direction of the industry.
In addition to having a vision towards the future, they need to consider global supply points. For example, North America was once considered a poor area for investment because gas prices were exceptionally high. But players with global supply points could rely on capacity and low cost positions elsewhere in the world to feed the world market.
Lastly, chemical companies need to embrace and continuously invest in new technologies —both process technology to operate more efficiently and effectively, and product technology to create more advanced and innovative products.
You live in Houston, so can you comment on the unique opportunities for chemical companies in the Houston market?
The Houston market is unique because it’s probably the largest pool of quality chemistry and engineering talent that you could find anywhere in the world. We have several universities with excellent engineering programs. With all that great talent, many chemical companies have global or divisional headquarters here. So, you can have a career in the industry at several leading companies and never have to move!
You did some fantastic research on big bang disruption in chemicals. Can you give us a brief summary of that project?
The North American big bang disruption, as we define it, was brought about by the development of shale gas in North America. This resulted in very low gas prices and encouraged new petrochemical company investments to soar.
There are several disruptive elements associated with the above events. Our big concern is, “How are companies going to sell and move all the product?” The domestic market share battle will be fierce, finding customers overseas will be critical, and making the “right” decisions about transportation logistics will be of strategic importance.
What life experiences led you to a career in chemicals?
That’s easy. My father was in the chemical industry. He was involved in the early development of PVC shrink film, which is so common today. He also travelled the world licensing rubber technology and learned multiple languages. So far, I have done business in over 30 countries but haven’t made as much progress on languages!
You are a passionate woodworker and love to hike. Tell us about these hobbies.
I love woodworking as I really like building new things. Recently, I’ve built a kitchen table and mission-style recliner for my home―I can even sit and edit my research papers in the chair I’ve built! While I’m doing my woodwork, I try to think about creative ways to solve problems. I also enjoy hiking and exploring new trails in deserts or mountains. In a way, problem solving and exploration help foster strategic research thinking as well!