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I wanted to start a blog with a theme and purpose and was
inspired by content and discussions at three events I attended
recently in Texas: Our own IHS Markit World Petrochemicals
Conference in San Antonio, which came hard on the heels of IHS
Markit flagship meeting in Houston, CERAWeek—now referred to as
the Davos of the energy world—followed by the AFPM
International Petrochemicals Forum in San Antonio. All were focused
on similar topics of geopolitics, energy, sustainability, finance,
markets, and trade.
Three weeks of events, with thousands of oil, gas, chemical, and
related industry executives, politicians, environmentalists, and
technology providers, often at the highest level, focused on
driving global business, amid the great US shale-led manufacturing
resurgence, while also amid increasing public attention and
scrutiny.
Plastics were high profile, rising in importance as a value
stream for oil and gas producers as energy demand wanes, but also
suffering negative sentiment in society linked to marine litter and
other waste issues.
Plastics as a material, and plastics waste as a resource, are
undervalued by society. Captains of the Petrochemical industry,
notably Jim Fitterling of Dow Chemical and Bob Patel of
LyondellBasell, have taken proactive roles in the past year to
solve the marine litter problem from within the industry and shown
strong leadership—more specifics of that another time.
One event at AFPM was the award of the Science History Institute
2019 Petrochemical Heritage Award to brothers and industry figures
James and Albert Chao, respectively Chairman and President/CEO of
Westlake Chemical (Houston; TX). Their father received the Award 14
years ago and the brothers have continued with the same business
values of TT Chao, who started making PVC in Asia in the mid-1950s
with investment assistance from US AID.
In 1964, TT Chao started his own company in Taiwan—China
Plastics Company Ltd—and later formed a multinational joint
venture—one of many he created—with toy-maker Mattel,
becoming the exclusive manufacturer of Barbie dolls over a period
of 22 years. And by the way—Barbie turned 60 this year!
(Diversity alert, but many readers will have fond childhood
memories of the toy and perhaps ongoing experience ...)
James told an interesting anecdote of how his father was nearly
deprived of US seed investment when a competitor lodged a
complaint. When mainland China press reported this news by
suggesting it was high-handed treatment from so called-friends of
the young Taiwan industry, the US government swiftly confirmed the
investment.
Westlake, is a great story of family business success, building
some $9 billion in olefins and polymers revenue over three decades
since its founding in 1986. Acquisitions include plants or business
units from Air Products, CertainTeed, Eastman, Vinnolit (the PVC
businesses of Wacker and Hoechst), and Axiall (Georgia Gulf, Vista
and PPG).
Today, Westlake operates in 13 countries, with 50 sites in Asia,
Europe, and North America and ranking number one in global capacity
of specialty PVC, number three in chlor-alkali and PVC, and number
two in LDPE in North America.
We know the Chao brothers to be benefactors and sponsors of
knowledge and learning. They have extensive corporate and business
insight, having grown up and been educated in the petrochemical,
plastics, and downstream industries and served on many boards and
international joint ventures set up by their father.
James referenced the only other family to have both father and
sons presented with the Petrochemical Heritage Award—Jon and
Peter Huntsman, whose significant philanthropy include building the
Huntsman Cancer Institute in Salt Lake City, Utah.
Albert has been attending the AFPM (formerly NPRA's)
International Petrochemical Conference since the early 1980s and
describes it as like coming back to a family reunion.
This is one of the industry's great strengths—in unity,
which is visible now in the fight against plastics marine
waste.
A guiding philosophy for the Chao family in building Westlake
has been to remain a family-oriented growth company that places
employees and their safety first, focused on businesses they
understand, with technological and/or feedstock advantages and
disciplined financials, to be an investment-grade company in the
$5.7 trillion chemical industry.
Faced with a backlash about single-use plastics, mounting land
and ocean wastes, and global warming caused by increased greenhouse
gases, Albert acknowledges that as an industry and as citizens of
the world, executives must be proactive in solving global
sustainability issues. At Westlake, this means achieving 30%
reduction in CO2 emissions, reducing sulphur dioxide emissions to
near zero, cutting energy and waste per ton of product, joining
solid waste reduction efforts, and helping recyclers and
municipalities with R&D to capture and recycle packaging
waste
More recently, Westlake has joined the Alliance to End Plastic
Waste, (led by Fitterling and Patel, mentioned above), along with
35 global chemical and plastic manufactures, plus packaging, and
consumer retailing companies, to advance solutions to eliminate
plastic waste in the global environment, especially in the oceans.
Alliance members have committed to spend over $1 billion towards
the $1.5 billion goal over the next five years to develop,
accelerate, and deploy solutions; catalyze public and private
investments; and engage communities globally to help end plastic
waste in the environment.
Albert points out: "We are all in this together and I urge you
and your companies to join hands together in solving these ominous
global environmental problems and make the world a better place for
all of us and our future generations."
It is worth noting here that PVC is one of the plastics most
subject to attack for its environmental impact, yet is essential to
the production of blood bags, trachea tubes, and other critical
applications.
At the 2005 ceremony to accept the Petrochemical Heritage Award
posthumously to his father, Albert cited more of the company's
founding principles.
"We must acknowledge that we are an organization, not of
machines, chemical processes and production output, but of people.
While often a trite statement, people are ultimately the essence of
our success."
"We must take pride in being good citizens of the communities in
which we live and operate. A sense of community means we embrace a
compassionate posture toward our neighbors, communities, and our
environment."
These surely must be a mantra for all.
Posted 20 June 2019 by Lyn Tattum, Vice President, Business Information and Same Day Analysis/ Oil, Midstream, Downstream, Chemical Group, IHS Markit