1. Industry & Parliament Trust, Ludwigshafen
21st July, 2016
Chemistry Growth Partnership
Philip Robinson
2. Chemistry Growth Partnership
• Scope - to address headline themes:
– Energy & Feedstocks
– Innovation
– Supply chains
• Underpinned by work on:
– Exports
– Skills
– Access to Finance
• Leading to creation of “Chemistry Growth
Partnership” (CGP) in October 2013
3. CGP: Membership
• Anna Soubry BIS Minister and MP (co-chair)
• Steve Foots (Croda International & co-chair)
• Tony Bastock (Contract Chemicals)
• Paul Booth (SABIC UK Petrochemicals)
• Charles Bragg (P&G)
• Tom Crotty (Ineos)
• Torben Jensen (BASF)
• Ian Shott (Shott Trinova)
• Harry Swan (Thomas Swan)
• Dave Tudor (GSK)
• Ian Waddell (UNITE)
• Calum MacLean (Synthomer)
• Robert MacLeod (Johnson Matthey)
4. CGP Vision
“By 2030, the UK chemical industry will have further reinforced
its position as the country’s leading manufacturing exporter and
enabled the chemistry-using industries to increase their Gross
Value Added contribution to the UK economy by 50%, from £195
billion to £300 billion.
Secure and competitive energy and feedstock, accelerated
innovation and strengthened supply chains will be critical in
realising this vision.”
5. Strategic Priorities and Enabling Themes
Three Strategic Priorities
Six Underpinning, Enabling Themes
• Skills
• Climate change solutions
• Leveraging Government initiatives
• Trade opportunities
• Regulation
• Finance and Funding
5
Securing competitive
energy and feedstocks
Rebuilding UK Chemistry
supply chains
Accelerating Innovation
£35bn £35bn£35bn
providing an additional £105 bn growth in GVA
6. Are chemicals
important?
Worldwide
Chemicals 4.3 trillion dollars/year
Automotive 2.8 trillion dollars/year
Europe
Chemicals 1.0 trillion dollars/year
Automotive 1.0 trillion dollars/year
Chemicals in Europe employs
1.7 million people direct
7.0 million people including indirects
European Chemicals exports 70 billion dollars/year
Most other major industry sectors
rely on the European chemical
industry for their raw materials
A sense of scale …
7. Impact on global chemicals
economics
Source: ICIS
US and Western
European costs were
comparable in 2005
US shale gas has been a
‘game changer’
8. Impact on global chemicals
economics
Source: ICIS
US and Western
European costs
were comparable in
2005
Ethylene costs are
now 2x higher in
Western Europe
Western European
manufacturers are
struggling to
compete
US ethylene costs
are now comparable
with the Middle East
US shale gas has been a
‘game changer’
9. Utilise a national asset for national
benefit
- Exchequer revenue
- Balance of payments
- Wealth and job creation
- Downward pressure on gas price
- Security of supply
Play our part in making European
energy and feedstock prices
competitive
The very survival of the Chemicals
industry and other energy intensive
industries is at stake
What can UK and EU shale
production deliver?
Source: BGS 2013
10. A Strategy for Innovation in the UK
Chemistry-using Industries (2013)
— Prepared by CIKTN and CPI and adopted by CGP
— Report identifies 8 priority manufacturing sectors
& 3 focus areas
11. 1. Aerospace – lightweight materials and formulated products for lower cost and
reduced environmental impact;
2. Automotive – low carbon vehicles with improved driver experience;
3. Construction – Sustainable, low carbon buildings delivered through the whole
supply chain;
4. Energy Generation & Supply – Delivering secure, economical, sustainable
energy;
5. Life Sciences – Personalised treatments requiring niche, high-value products
with improved delivery;
6. Food – Food for the world: nutritional, pleasurable and sustainable;
7. Home & Personal Care – Delivering desired functionality to a demanding
consumer base using natural ingredients and clever formulation; and
8. Chemicals Manufacturing - Manufacturing chemicals more competitively and
sustainably from a variety of feedstocks.
Chemistry Innovation Strategy
8 Priority Manufacturing Sectors
12. To establish the UK as a world leader in:
The development and
deployment of
Industrial
Biotechnology
Process Intensification
productively delivering
global competitiveness
for UK manufacturing
The development and
production of high
performance
Functional Materials
Developing options for UK chemical feedstocks, including unconventional oil & gas
Driving economic growth through SMEs and exploiting local specialisation and capability
Strategic Objectives:
Accelerating Innovation
13. Journey of IB: the opportunity for growth
2009--------2015-----------------2025
£1.8Bn
£4.5Bn
£12B
14. National Formulation Centre
Overarching Capability to Enable Outstanding R&D
i) Access to Expert staff with multi-sector experience
ii) Digital Infrastructure- Informatics and Modelling
iii) Experimental Design
iv) Data Analytics
Complex Solids Handling and Preparation
i) SHEQ Enabled for Nano-materials and powders- High grade air handling
ii) Milling
iii) Plasma functionalisation
iv) Mixing (high shear, low shear, turbine)
v) Atomic Layer Deposition/ Chemical Vapour Deposition
Formulation Preparation
HTE
Draw downs (coatings)
Plaques (composites)
Injection Moulding
Formulation Application Testing
Electrical
Thermal
Abrasion
Lubricity
Complex Liquids Handing
and Preparation
Flow reactors
OBR
Scalable Batch
Process Scale-Up and Metrology
Metrology
Modelling
15. Supply Chain Working Group Vision
Supply Chain Working Group: Vision
By 2030 the UK chemistry-using supply chain will
have delivered £35bn of increased GVA
This will achieved by focussing on the following Strategic Priorities:
o Understanding our strengths and delivering new growth opportunities in selected target sectors
o Establishing the capacity and capability to deliver that growth
o Identifying and securing critical infrastructure
o Communicating the existence and contribution of the CGP’s SC Working Group to the chemistry-
using industries and the wider economy
o Strengthening connectivity and clustering
o Ensuring associated supply chain skills / capability are available
o Highlighting the requirements in terms of a government policy framework
17. Suppliers
Products
Pharmaceuticals
Diversified
Fine and SpecialityPrimary Building
Blocks
Raw
Materials
Oil
Gas
Biomass
Minerals
Coal
Water
Air
Energy
Speciality
Organics &
Inorganics
Plastics and
Rubber
Industrial
Gases
Fertilisers
Basic
Organics
Man-made
Fibres
Basic
Inorganics
Agrochemicals
Food
Additives
Additives
Diversified Product Companies
Speciality
Polymers
Basic Pharma
Animal
Health
Cell Cultures
and Reagents
Pharma
Preparations
Paints, Inks and
Coatings
Glues &
Gelatines
Explosives
Photographic
Chemicals
Soaps and
Detergents
Personal Care
Products
Other
End User
Markets
Materials
Supply
Equipment
Supply
Engineering
Services
Packaging
Transport
& Logistics
Storage
Waste
Handling
Professional
Services
26. Supply Chain Working Group Focus
Supply Chain Sub-Group: Sector Groups
• Automotive
• Pharmaceutical
• Chemical Manufacturing
• Home & Personal Care
• Aerospace
• Construction
34. Medium term opportunities - synergistic link to existing TVPI assets and/or
production streams and which could give the TVPI a sustained competitive
advantage over other international sites.
Opportunity Downstream Benefit Potential Constraint / Mitigation / Action
Acrylic Acid and Acrylates
production
Acrylic Acid to Esters for Paints and Coatings
Acrylic Acid to Super adsorbent polymer for
consumer, plant media medical and (emerging)
industrial good
Proprietary technologies from Asia
but derivatives markets mentioned
have good growth.
Needs low cost propylene as
feedstock
Acrylonitrile (AN) from PDH or
Naphtha
Acrylonitrile to AN Butadiene Styrene Copolymer /
Styrene AN
Acrylonitrile to Poly AN to Carbon Fibre. Lightweight
high strength materials for use in cars, trucks, bridges,
aerospace, sports and medical equipment
Unfashionable but derivatives
markets mentioned have good
growth.
Needs propylene as feedstock
Ammonium carbonate and
bicarbonate
Local ammonia plus local waste CO2. There are
customer blending opportunities
Investor required
35. Opportunity Downstream Benefit Potential Constraint / Mitigation / Action
Animal feed production
Related to previous example. There are existing and
potential resources within TVPI, e.g. minerals and
bio-based
Mostly small size but high value
trace materials plus some general
bio-waste beneficiation
Cellulosic ethanol (CE), Bio-
based materials and Sugars e.g.
Citral and Dibasic Acids
Historically sugar based chemistry for ethanol but CE
is more attractive for making green ethylene. Niche
demand exists today and will grow Sugars can
provide specialities and many intermediates e.g.
FDCA as a PTA replacement
Major long term technical issues
remain. Some progress from
Scandinavian and Italian
innovators.
Chloralkali e.g.
NaOH + Cl2 + H2 (pure)
KOH + Cl2 + H2
An enabler for Chlorine derivatives e.g. TiO2 and
other minerals; shale via HCl; esterification of
biomaterial.
Chlorinated isocyanurates option.
Target KOH rather than NaOH
Sustainability and safety
enhanced by avoiding Chlorine
shipment for water treatment -
Trans Pennines
Coal chemistry
Pitch feedstock is basis to make advanced specialty
high value materials to be converted locally e.g. Pitch
carbon fibre, specialist phenols. Large global
speciality materials company has wider for plans Coal
to Ethanol for refinery mandate.
Intellectual Property (IP)
innovation and ownership
Affordable power is an enabler.
Optimisation studies required
Ethylene specialities
EO derivatives
Linear Alpha Olefins
Alpha MMA
Provides basis for revival of fine chemical using EO
as a building block.
Several ethylene LAO technologies available.
MMA via ethylene - many downstream markets
Commit to ethylene cracker
expansion.
Active lobby programme
Fertiliser - Blending and Exports
Expand on the Mineral base with cheap local power
to build unique cost competitive business
Real advantages over Rotterdam
& Antwerp need to be publicised
36. Opportunity Downstream Benefit Potential Constraint / Mitigation / Action
Mineral Beneficiation
As with fertiliser, real local resources mean this is
a strategic opportunity.
Build on existing project which
are largely based on non-UK
firms. Needs UK Plc approach
Post-consumer waste
beneficiation
Numerous TVPI chemistries based in Innovation
Parks and local know-how for fillers for rubbers
and plastics
IP innovation and ownership
Affordable power is an enabler.
Optimisation studies required
Poly-tunnel and Algal Pool
Uses for CO2
Land availability, CO2 (and H2) plus waste heat to
make highly effective plant growth media.
Studies ongoing
IP innovation and ownership
Build on sugar to biochemical
knowhow.
Special salts e.g. MgCl2 to Mg
metal from Seawater
Historically magnesium and aluminium production
was within TVPI (Alcan in Lynemouth) but no
longer, predominantly due to high power costs.
Lithium and magnesium are used in the
production of light-weighting in cars, plus
aerospace and interruptible power.
Power resources are required
for long term solutions.
Derivatives markets mentioned
have good growth.
Surface chemistry
EU Framework Programme (F8) based innovation
e.g. graphene and PVD (Physical Vapour
Deposition) and CVD (Chemical Vapour
Deposition) services
Lack of entrepreneurial spirt in
University portion of F8
participants
Waste Stream Recovery from
Industry – Multiple Options
There are existing immediate opportunities from
the survey and potential new concepts, e.g.
Scandium and other rare earth elements from
TiO2 and fuel ash mining
Mostly small size but early
returns. Plus with innovation
funding some high value metals
and some general plastics
valorisation prospects
37. Antwerp
Rotterdam
An impressive site/hub for
containers, refinery and fuel, bio
feedstocks, food, grains and
minerals.
Antwerp
Manufacturing hub for downstream
development such a car parts
moulders and consumer goods.
TVPI
Has the potential to mirror Antwerp
in terms of size/activity.
Has advantages of oil and gas
pipeline, coal bed methane, mineral
resources and matching
infrastructure.
Needs to attract more large players
to expand value chain.
38. Products Materials Park Market Segments
Ethane
Naphtha
TeessideCracker
3rdlargestinEU
Primary
ChemicalsPark
ConversionPark(s)
CO2 Feedstock
Methanol Chain
Ammonia
Pitch Tars
Ethylene Chain
Propylene Chain
C4s
Pygas
Pyoll
Specialty Films
Household Products
Fertiliser Systems
Adhesives/Sealants
Paints & Coatings
Windmill Laminates
Oil & Gas Chemicals
Detergents
Water Treatment
Cables
Construction Material
Textiles
Furniture/Insulation
Automotive Parts
Aerospace Materials
Shale
Gas
Benzene/Aniline
Hydrogen
Sea Bed
Coal
Biogas
Chemicals
Users
Syngas
TVPI Current and Future?
EQUATES TO1 job 10 jobs
39. Conclusions
• Every major UK manufacturing sector relies on
chemicals
• It is therefore critical to build a strong UK chemical
industry with supply chains into these key sectors
• There are enormous opportunities for innovation
and growth in the UK
• The Chemistry Growth Partnership is working with
stakeholders and the UK government to ensure that
we take advantage of these opportunities
39
40. Industry & Parliament Trust, Ludwigshafen
21st July, 2016
Chemistry Growth Partnership
Philip Robinson
Thank You … Any Questions ?
