Muddy boots and motivation

York, UK - With annual sales of almost £30 billion, 16,000 employees and 70 sites worldwide, INEOS is one of the world’s largest chemical companies. The integrated petrochemicals business has grown rapidly in recent years, particularly through acquisitions from ICI and, more recently, BP.

INEOS operations span everything from refining all the way down the supply chain to production of many industrial polymers and speciality chemicals. The company’s strategic importance was highlighted last year when a strike at its Grangemouth site in Scotland impacted the flow of North Sea oil and threatened UK fuel supplies.

“Getting things right is critically important, not just to us as a company but also to the country,” Tom Crotty, chief executive, INEOS Olefins and Polymers, said at the National Skills Academy Process Industries recent national conference in York.

The INEOS chief’s presentation focused first on issues at the Grangemouth site, where there is huge on-going investment in infrastructure and feedstock facilities, to upgrade all aspects of the former BP operation, including skills.

“Our business is chemicals, and our approach to investment in terms of skills development is quite different [to BP’s],” said Crotty. “We have a lot of change programmes in Grangemouth. We are in-sourcing significantly our skills. A lot of it was outsourced to third parties, which we feel very uncomfortable with. There are too many key skills we cannot afford to lose on that site.”

Describing outsourcing as a dangerous place to be from a cost-control point of view, the CEO said: “We always have an approach when we buy businesses that we can take a lot of costs out of the operation. Typically, 25-30% of those costs come out of every acquired business within two years … So we are taking out contract employees in non-productive areas and reinvesting some of that money back into people we employ in areas that are productive.”

Crotty went on to identify problems in recruiting good quality people in particular skills areas, including process engineers and electrical instrumentation engineers. He further noted a worrying fall in the number of applications for apprenticeships and graduate engineering positions, and described the age profile of the INEOS workforce as one of the most serious issues facing both his company, and the process industry in general.

INEOS, said Crotty, is typical of most process companies. It has a high proportion of employees in the 46-55 age group, many of whom will be retiring within the next 10 years. Conversely, the percentage of employees aged around 25 years old is much smaller.

“”This is about motivation and encouraging youngsters to think positively about careers in these industries. The real issue is around trying to ensure we have young people interested in coming in to the process industries,” said the INEOS boss.

“I am not sure we are getting that right. This is a big challenge for us as a country, a challenge that the government needs to understand and take on board. There is a strong drive to get children into tertiary education, but is that drive putting them into the skills areas that are really going to benefit the country in 15-20 years from now? I question that seriously.”

Financial issues

Meanwhile, INEOS management is determined that the company’s own current financial issues do impact on its on-going skills programmes.

“We are a leveraged company and have been going through discussions with creditors, like other companies with significant debt, and have restructured our finances” said Crotty. “We feel that we are coming out of the black hole that we saw late last year. We have cut back a huge amount on spending across our operations, but one area we haven’t cut back on is this area [skills development] because this is something you cannot cut into and out of. You can’t suddenly say we are not going to have an apprenticeship scheme and then two years later say yes, we are. This is a long-term plan.”

Indeed, the CEO described INEOS’s commitment to Modern Apprenticeships as “absolutely critical,” noting that the company’s current UK complement of 135 apprentices was at the bottom of its target range, and that more were needed. The company, he added, also tries to over-commit on apprenticeship schemes so as to provide a spillover effect for SMEs that provide important support services for its sites.

Meanwhile, INEOS is working very closely with Cogent and the National Skills Academy Process Industries. “We are very committed to [NSAPI] and are putting cash and resources into it,” Crotty confirmed. “We think it is extremely important. We use industry-specific training providers who understand exactly what we want and how we want it delivered.

“So here in England and Wales, and I would like to say at some stage in the UK, we use NSAPI accreditation. And we ensure that new training is to national standards, so we don’t have to reinvent the wheel. Cogent Gold Standard will tell us if training is good or worth avoiding.”

Another flagship training initiative at Grangemouth is its recently introduced Engineer of the Future scheme, a partnership with Forth Valley College and Herriot Watt University. This was started after a senior manager at INEOS’s Cologne operation came in to run the Grangemouth site three years ago and found that the quality of training was significantly below that in Germany.

“Most graduate engineers do not have the right skills for industry, explained Crotty . “We were getting people that were too academic and did not have enough of a practical basis.”

The Engineer of the Future scheme takes people through an accelerated apprenticeship scheme. Trainees then go on to work at INEOS through to achieving a full engineering degree.

“So we have people at the end of that process who not only have got engineering degree qualifications, but who also have the mud on the boots, the oil on their hands, the spanner skills that are required to run a chemical plant, not just the theory, but the practice,” said Crotty.

Process industry companies in Germany have been providing this sort of training for many years, and concluded Crotty: “This is also something that is starting to expand beyond INEOS into other companies. I think it is tremendously important for us in the future and something I hope we will learn from.”