Business Briefing June 2008

BUSINESS BRIEFING: JUNE 2008

Shell boss targets Asia challenges

Shell / N/a: Asia Pacific remains the most exciting region for petrochemicals, Shell Chemicals executive vice president Ben van Beurden said at the recent Asia Petrochemical Industries Conference in Singapore. By 2010 around 30% of Shell's chemicals manufacturing assets will be located in Asia Pacific and the Middle East, and focused primarily on supplying the Asia Pacific market. However, van Beurden added, the region;s industry will face significant challenges relating to energy and feedstock availability and climate change.  "Unless we take quick action, the concentration of CO2 and other greenhouse gases in the atmosphere could reach levels which would have serious climate change consequences ... "We can and will develop new energy resources. We can and will develop new feedstock routes. And we have already shown an ability to increase our energy efficiency and reduce the environmental footprints of our plants and processes."

EIU study: Credit crunch drives manufacturing change

An Economist Intelligence Unit survey of over 600 senior executives across Europe and the US reveals that 65% of top bosses in the manufacturing sector say their change programmes – structured approaches to implementing and managing change within a company – are a direct response to the credit crunch. Accordingly, 33% of manufacturing leaders plan to increase their spending on change initiatives over the next 12 months, while 21% intend to spend less, the Celerant Consulting-commissioned study found. Some 54% of leaders in the manufacturing sector say that improving their company’s operational efficiency is the top issue on their agenda. The next most common priority was creating a new organisational structure with new roles (44%). The manufacturing sector sees reducing cost as significantly more important than increasing revenue (49% v. 33%), figures which are broadly in line with the survey as a whole (47% v. 32%). Despite the increasing number of change initiatives, the Economist Intelligence Unit survey suggests the majority will fail. 58% of leaders in the leaders sector questioned said that half or fewer of the change programmes they have undertaken in the past five years have been successful. The most significant challenges faced by manufacturers in executing change programmes include winning the hearts and minds of staff (53%) and a lack of buy-in from local management (30%).

AMEC, BP enter global projects deal

AMEC has entered into an agreement with BP International Ltd to provide engineering and project management services for BP's offshore developments worldwide. AMEC is one of three companies selected by BP for this long-term agreement, which sets out the principles of collaborative working for the next four years with an option to extend. It will enable BP's project management teams to access AMEC's international resources when and where required. BP has a substantial programme of offshore development projects planned for the next 10 years, primarily across the seven strategic areas of Angola, Asia-Pacific, Azerbaijan, Egypt, Gulf of Mexico, the North Sea and Trinidad.

PricewaterhouseCoopers enters REACH JV

PricewaterhouseCoopers and Royal Haskoning: Have signed a joint venture agreement to combine their knowledge in the field of REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) - the new European chemicals regulation. The collaboration combines Royal Haskoning’s technical knowledge of chemicals with PwC’s financial and administrative knowledge about REACH and the management of risks. "This collaboration enables us to offer the industry a comprehensive package of services that will be needed in future to fulfil the REACH registration of chemicals,’ said Arno Pouw, of the PwC board. ‘For example, companies will need an independent party who can perform the role of Third Party Representative for their Reach registration or a party that can act for a consortium of companies working together on the registration of a particular chemical.’

Swagelok ties up Coreflex

Swagelok Co. has completed its acquisition of Coreflex LLC, a Bowie, Maryland-based manufacturer of hose products used mostly in semiconductor and biopharmaceutical applications. “We are excited about this acquisition,” says Arthur Anton, Swagelok president and CEO, “because these ... hose products, combined with our network of authorized Swagelok sales and service centers, will help us provide better solutions to our customers worldwide.”

Pursuit Dynamics, Air Products deal targets sauces

Pursuit Dynamics and Air Products have collaborated to launch the PDX Sonic and the Freshline Continuous Sauce Chiller as an integrated single line production unit.  The combined solution for cooking and chilling sauces can reduce processing time, increase throughput capacity and maximise plant cost-effectiveness by remaining within or even reducing the existing equipment footprint, the partners claim. Unlike traditional processing equipment, the system can be retrofitted readily into existing plant layouts. Pursuit Dynamics is now offering companies the opportunity to see the system in action at its site in Huntingdon, UK. Uwe Rosenbaum, new business development manager, Food, Air Products Europe, said: “The combined system allows for rapid sauce cooking and chilling and can fit easily within limited floor space, making it ideal for food processors looking for new solutions in sauce manufacturing.”

Air Liquide acquisition of Edwards Chemical Management

Air Liquide Electronics U.S. LP is to purchase the major part of the assets of Edwards Vacuum Inc’s Chemical Management Division, which  is focused on designing, manufacturing, and selling chemical and slurry dispensing equipment, installations and services to leading semiconductors as well as OEMs worldwide. With production based in Chanhassen, Minnesota, it employs about 120 people (including 20% in Asia and Europe) and has annual sales of about $50m. Christophe Fontaine, VP Electronics, Air Liquide Group, said: “This acquisition will bring key complements to our current portfolio, especially allowing us to cover the whole equipment and installation spectrum for ultra-pure fluids with the key players of the electronics industry.”

Energy crisis the catalyst for new chemical engineering group

The IChemE is re-launching its Catalysis Subject Group, in response, it said, to a surge of interest in the prospect that catalysis can contribute to solving future energy shortages. The group will organise events to provide a forum for exchange of ideas amongst scientists and engineers on all aspects of application of catalysis to process systems.  Andrew Furlong, director of policy at the Institution said: “There is an urgent need to develop alternative, sustainable sources of clean energy and by bringing together catalysis experts into a ‘Catalysis Community’, they will be more likely to deliver novel and imaginative solutions to combat the impending energy shortages facing the planet. Whilst there are superb ideas out there, it is the transfer gap between basic science and industrial applications that needs to be overcome to advance new ideas at a speed commensurate with future requirements and legislation.”

Manufacturing costs to rise amid slowdown

The highest percentage of manufacturing firms since 1995 have told the CBI their products will get more expensive over the coming three months, as rising oil prices drive up costs. At the same time though, manufacturers said their order books are 'below normal' and that they don't expect output to grow in the next quarter, the CBI's May Industrial Trends Survey found. Despite shrinking demand, 36% of manufacturers expect they will put their prices up over the next quarter. The price of a barrel of oil averaged $118.10 in the survey period, a month-on-month rise of 14%. Metals prices rose almost 5% between April and May, food continued to become more expensive. The need to pass on these cost pressures is being felt most intensely among capital goods firms, like machinery and plant manufacturers but it is makers of intermediate goods, which include energy and commodity intensive industries, who continue to expect the highest rate of price inflation. Ian McCafferty, chief economic adviser at the CBI, said:  "It is clear from the pricing data in the survey that manufacturers are really feeling the impact and having to pass their increasing costs on. Oil prices rose more than 75% over the last year, and 14% in the past month alone.

Sustainable business improvement

Sustainable business improvement is the aim of a series of Masterclasses at Manchester’s Manufacturing Institute, beginning July 2008. Combining case studies from manufacturers who’ve been there and are prepared to share their story, with expert know how of manufacturing excellence, the seminars will provide delegates with proven solutions they can apply to their business.
This year's events are:
July 17: Lean Enterprise Masterclass. Lean transformation boosts performance and productivity, but this Masterclass also shows that companies must fundamentally redesign their business to deliver what customers want, when they want it. Senior managers from Nissan, United Biscuits, Ultraframe and Cannon Hygiene will be presenting at the event.
18 Sept: Leadership & Culture for Lean Masterclass. Lean must be employee-driven rather than management-driven. This class will explain the critical success factors for lean transformation, common reasons for failure and the importance of leadership in the process. Delegates will learn how to build a culture that supports operational excellence, and gain an understanding of the role of HR.
27 Nov: Energy & Environment Masterclass. Growing customer expectations and increasing legislation mean businesses cannot afford to ignore green issues. But ‘going green’ can lead to operational savings and improvements in productivity – and give a business competitive advantage.