Catalyst

Multinational oil and petrochemical companies’ diverse workforces are an important resource that is relatively untapped and should be used to greater advantage, says Rob Routs, executive director/downstream at Royal Dutch Shell. In a keynote address to the 41st European Petrochemical Association (EPCA) annual meeting, which began today in Berlin, Routs said companies “that do not have a policy encouraging diversity and inclusion will have a tremendous disadvantage on the world stage.” That diversity may be cultural, ethnic, or intellectual, or related to gender or sexual orientation, Routs says.
Multinationals that supply or consume energy face three major challenges, Routs says. They are: Keeping up with demand; shrinking supply; and the impact of energy use on the environment, he says. “All these challenges will impact all of us,” Routs says. “Addressing these challenges will involve a wide array of people around the world, and we must seek out talent wherever we find it.” Making the most of this diversity is at the core of Shell’s strategy, Routs says. “We have different people from different backgrounds and cultures, and we’ve got them to work together,” Routs says. “Human energy” is a great asset and firms “should not waste this most precious resource,” he says. Companies should not “tolerate” difference, they should “value it,” Routs says.

–Ian Young in Berlin

The Chinese government is pressuring the country’s state-owned chemical sector to consolidate, in a bid to improve competitiveness, speakers told delegates at CW’s 13th annual China Chemical Industry (ChinaChem) conference, currently taking place in Shanghai. “There are too many small and medium-sized chemical enterprises in China,” Fan Xiaosen, v.p. at China National Chemical Industry Corp. (ChemChina; Beijing) says. “We need to build up a group of large chemical corporations.” The average annual sales of China’s top 100 chemical companies is just Rmb27.7 billion ($3.7 billion) compared with Rmb150 billion for the top 100 chemical firms in the rest of the world, Fan says. Scarcity of natural resources in China, tightening environmental legislation, and the need for more efficient spending on R&D will drive consolidation. “We believe the whole industry will become more consolidated,” says Zhang Pei Zhang, chaiman of Shanghai Hua Yi Group (Shanghai). “It’s still fragmented and we think it’s going to get more consolidated, and that’s good for environmental protection.” China’s rapidly expanding, integrated chemical parks will also assist the consolidation process, Zhang says. The number of state-owned chemical enterprises in China is likely to be cut by half. “There are 154 chemical companies under central government control, and it’s expected that this will be consolidated down to about 80,” Fan says. State-owned ChemChina was created in 2004 as a vehicle for consolidating the chemical sector, and accounts for 47% of the 154 companies’ sales, Fan says. Huayi plans to become a “national company” via mergers and acquisitions, Zhang says.