Volume 6 December 2013 1

Chemical Parks

Life Science Clusters

Economic Perspectives

Europe – Americas – Asia

Investment Opportunities HERE’S YOUR NEXT

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A2 A10

A9 A13 A14 50% REDUCTION BITTERFELD- HALLE WOLFEN A13 AIRPORT IN R&D COSTS A38 HALLE-LEIPIG Ontario’s R&D incentives SCHKOPAU BÖHLEN SCHWARZ- LEUNA A14 HEIDE are among the most ZEITZ A4 generous in the world

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Paid for by the Government of Ontario. Editorial Sustainable Competitiveness

Dear Reader, tion among locations for investments but it is not tainable. Many countries at the just the growth perspectives of the market, the in- top of the competitiveness rank- In this 2013 edition of ‘Regions & Locations Guide frastructure or the attractiveness of frame condi- ings are also the best perform- for the Chemical and Life Science Industry’ we are tions that tip the scales in favor of one location - the ers in many areas of sustainabil- again focusing on investment and operating condi- megatrend sustainability has also found its way into ity. The report, which we present tions in regional markets, chemical parks and life- investment decisions. in extracts on pages 4/5 profiles science clusters. With substantiated market reports Sustainable competitiveness is a nascent area of 148 economies and finds that and articles on industrial locations, our annual FDI research. The “Global Competitiveness Report 2013- highly innovative countries with supplement of CHEManager Europe provides essen- 2014” by the World Economic Forum develops fur- strong institutions continue to tial information for potential investors from the ther the conceptual framework for sustainable com- top the international competi- Dr. Michael global process industry and assists top executives petitiveness introduced in 2011. By combining social tiveness rankings. Reubold and strategic decision makers in facilitating invest- and environmental indicators with WEF’s Global ment decisions. Competitiveness Index, the organization has been Take the time to study this issue, it will be time well When looking for a site to invest in a production able to carry out a preliminary analysis of national invested. facility or a location to construct an office building sustainable competitiveness. The most important or even to set up regional headquarters, companies finding of this analysis is that there is no necessary need to consider several factors. There is a competi- trade-off between being competitive and being sus- Dr. Michael Reubold and the Regions & Locations Guide team

Content

WORLD EMERGING MARKETS 22 Doing Business the Indian Way 04 Global Competitiveness Index 14 Risky Business Multinationals Must Adapt to Local Practices Institutions and Innovation Increasingly Nuances of Insurance in Emerging Markets Vimal Choudhary, Alok Kshirsagnar, Important for Competitiveness of Locations Nigel Todd, FM Global Ananth Narayanan, McKinsey Jennifer Blanke, World Economic Forum MIDDLE EAST NORTH AMERICA 06 Global Investment Opportunities in Pharmaceuticals 16 Chemicals in the Middle East 24 A Game Changer The Drive Toward Downstream Expansion New Digital Pathology System for EUROPE Vir Lakshman and Rita Duran, KPMG Cancer Diagnoses Set up in Ontario Dr. Terrie Romano, Ontario International 08 European Chemical Industry Parks 2.0 18 Bringing Innovation and Marketing Centre How to Sustainably Increase the Industrialization to Life Competitiveness of European Sites Bahrain is an Attractive Base for Christoph Behrendt, Scopein Management Accessing the GCC Market 25 Turning Sarnia Green Consultants Dr. Michael Reubold, CHEManager Hybrid Chemistry Center Sprouts from Petroleum-Based Cluster 12 The Lacq Gas Basin, ASIA Murray McLaughlin, Biodindustrial a Model Industrial Reconversion 20 Spoiled for Choice Innovation Centre Sarnia 13 Chemicals and Plastics in Chemical Parks and Site Selection in China North-Rine-Westphalia Dr. Kai Pflug, Management Consulting - 26 Wave of New Investments in NRW.Invest Chemicals US Manufacturing

www.chemanager.com Regions & Locations Guide 2012 • 3 World

Global Competitiveness Index Institutions and Innovation Increasingly Important for Competitiveness of Locations

Contest of Nations – Excellent innovation and strong institutional envi- ronments are increasingly influencing economies’ competitiveness, ac- cording to The Global Competitiveness Report 2013-2014. The report is- sued by the World Economic Forum (WEF) profiles 148 economies and finds that highly innovative countries with strong institutions continue to top the international competitiveness rankings.

The report’s Global Competitiveness Index (GCI) that also takes countries’ sustainability performance into ac- count places Switzerland at the top of the ranking for the fifth year running. Jennifer Blanke, Singapore and Finland remain in sec- Chief Economist, ond and third positions respectively. Senior Director, Germany moves up two places (rank World Economic 4) and the United States reverses a Forum four-year downward trend, climbing two places to 5. Hong Kong (7) and Japan (9) also close the gap on the confidence in its public institutions. most competitive economies, while However, serious concerns persist Sweden (6), the Netherlands (8) and over its macroeconomic stability, the United Kingdom (10) fall. which ranks 117 out of 148 econo- mies. The performance of the United States in terms of sustainable com- Sustainable Competitiveness petitiveness is, as in the previous edi- tion, modest, with somewhat better Sustainable competitiveness is a nas- results for social than environmental cent area of research. In an effort to sustainability. proceed toward a better understand- Despite robust economic growth in ing of sustainable competitiveness, previous years, Latin America contin- the report develops further the con- ues to suffer from low rates of pro- ceptual framework for sustainable ductivity and the results show overall competitiveness introduced by the stagnation in competitiveness perfor- World Economic Forum in 2011. By mance. Chile (34) continues to lead combining social and environmental the regional rankings ahead of Pan- indicators with the GCI, the WEF has ama (40), Costa Rica (54) and Mexico ern European economies such as well-enforced regulations and the ex- been able to develop a preliminary (55), which all remain relatively sta- Spain (35), Italy (49), Portugal (51) istence of a large amount of protected framework for measuring the con- ble. Brazil’s (56) results on sustaina- and notably Greece (91) all need to land indicate Germany’s particular cept and to carry out a preliminary ble competitiveness are in line with continue addressing weaknesses in attention to environmental issues. analysis of national sustainable com- its GCI score. Protests recently took the functioning and efficiency of their petitiveness. The most important place in several of Brazil’s cities, and markets, boost innovation and im- finding of this analysis is that there is although the causes are complex, prove access to finance in order to BRICS Countries no necessary trade-off between being some of the country’s socioeconomic help bridge the region’s competitive- competitive and being sustainable. intricacies play a key role. Inefficient ness divide. Some of the world’s largest emerging Many countries at the top of the com- and expensive public transport, rising Switzerland remains at top of the market economies must also engage petitiveness rankings are also the prices compared to the level of sala- sustainability-adjusted GCI and shows business, government and civil soci- best performers in many areas of sus- ries, and poor access to credit, com- a high level of sustainability on both ety to implement long-overdue re- tainability. bined with strong income disparities, the social and environmental dimen- forms. Of the five BRICS, the People’s are undermining social sustainability sions of the index. Republic of China (29) continues to in the country. Germany performs relatively well lead the group, followed by South Af- Americas on both aspects of sustainability. On rica (53), Brazil (56), India (60) and the social sustainability pillar, rela- Russia (64). Among the BRICS, only The United States continues to be a Europe tively low youth unemployment, wide Russia improves its ranking, climbing world leader in bringing innovative access to healthcare, and the pres- three places, while Brazil drops eight products and services to market. Its In Europe, efforts to tackle public ence of a social safety net are the places. The Russian Federation is en- rise in the ranking is down to a per- debt and avoid a break-up of the euro main drivers of the positive assess- dowed with rich natural resources— ceived improvement in the country’s have taken the focus off addressing ment. Environmental sustainability is including some of the largest water financial market as well as greater deeper competitiveness issues. South- also relatively positive. Stringent and reserves in the world and wide-

4 • Regions & Locations Guide 2013 www.chemanager.com MORE THAN A PROMISE. Around the world, additives, effect pigments and paints from ALTANA set the tone. The experts for specialty chemicals headquartered on the Lower Rhine convince with particularly innovative products. And it’s no wonder, as the Lower Rhine location is situated in NORDRHEIN-WESTFALEN | NRW, Germany’s No. 1 chemical region. Our companies and research facilities develop expertise that also opens up top future prospects for you. In addition, established chemical parks have strong networks with optimal supply and production chains. Interested? www.nrwinvest.com World

(81) and Myanmar (139) join the in- A Shift in the Narrative of the Global dex for the first time. Economy

“Innovation becomes even more criti- Middle East and Africa cal in terms of an economy’s ability to foster future prosperity,” said Klaus In the Middle East and North Africa, Schwab, Founder and Executive Qatar (13) tops the region’s rankings, Chairman of the World Economic Fo- with the United Arab Emirates (19) rum. “I predict that the traditional entering the top 20 for the first time. distinction between countries being Saudi Arabia (20) falls two places. Is- ‘developed’ or ‘less developed’ will rael ranks 27. Egypt (118) drops a gradually disappear and we will in- further 11 places on last year’s index. stead refer to them much more in Bahrain (43), Jordan (68) and Mo- terms of being ‘innovation rich’ vs. rocco (77) also decline. Elsewhere in ‘innovation poor’ countries. It is the region, Algeria moves up to 100 therefore vital that leaders from busi- and Tunisia re-enters the index at 83. ness, government and civil society In sub-Saharan Africa, Mauritius work collaboratively to create educa- (45) overtakes South Africa (53) as tion systems and enable environ- the region’s most competitive econ- ments which foster innovation.” omy. South Africa’s social sustainabil- Xavier Sala-i-Martin, Professor of ity is undermined by high income in- Economics at the Columbia Univer- spread forests. The consequence is positive once the sustainability meas- equality and youth unemployment. In sity, USA, said: “The report highlights that Russia still performs relatively ures are taken into account. addition, the country has not yet a shift in the narrative of the global well on several environmental indi- India’s (60) sustainable competi- achieved universal access to sanita- economy from one year ago, when cators in international comparison, tiveness is characterized by con- tion. From an environmental point of fire-fighting still characterized much despite the depletion of those re- cerns in both areas of sustainability. view, South Africa’s performance is of global and regional economic pol- sources. On the social sustainability side, In- weakened mainly by increasing CO2 icy. This has now given way to an in- dia’s performance is hindered by emissions and strained water and creasing urgency for leaders to make lack of access to basic sanitation and fish stock resources. With only eight wide-ranging structural reforms to Asia health services for many of its citi- countries in the region featuring in their economies.” zens. And India’s environmental per- the top 100, profound efforts across Among the Asian economies, Indone- formance also hinders the achieve- the board are clearly needed to sia jumps to 38, making it the most ment of sustainable competitiveness. improve­ Africa’s competitiveness. improved of the G20 economies since Developing Asian nations display Among low-income economies, Kenya 2006, while Korea (25) falls by six very mixed performances and makes the biggest improvement, ris- Contact: places. Behind Singapore, Hong Kong, trends: Malaysia places 24th while ing by ten places to position 96. Nige- Jennifer Blanke, Chief Economist, Senior Director, World Japan and Taiwan (China) (12) all re- countries such as Nepal (117) and ria (120) continues to be ranked low, Economic Forum, Geneva, Switzerland main in the top 20. China’s (29) com- Pakistan (133) are near the bottom highlighting the need for it to diver- [email protected] petitiveness, however, is overall less of the ranking. Bhutan (109), Laos sify its economy. www.weforum.org/gcr

Global Investment Opportunities in Pharmaceuticals

Geographic diversification may be a In the Middle East, Saudi Arabia which is already being driven by epi- analysis on three countries of interest favorable strategy for multinational will continue to attract the interest of demiological factors. – Egypt, Saudi Arabia (and South Af- pharmaceutical companies, but it is foreign pharmaceutical companies, These are findings of an analysis rica) – including headline expendi- vital that firms recognize both the re- and not just that of multinationals. An on the Middle East’s Pharmaceuticals ture projections and key trends and wards and the risks present in a mar- increase in the number of joint ven- Investment Opportunities released in developments. ket, whether developed or emerging. ture (JV) agreements with local part- the BMI whitepaper ‘Middle East In- It is expected that Egypt’s pharma- Business Monitor International ners shows that generic drug-based vestment Opportunities in Pharma- ceutical market will experience nega- (BMI)’s Risk/Rewards Ratings (RRR) foreign players are also target- ceuticals: Risk/Reward Analysis’. tive shorter-term issues on account of tool provides a globally comparative ing the rising demand for a The whitepaper includes the protracted political turmoil. The and numerically based assessment of range of medical treat- country comparative whitepaper also notes that the cost of a market’s attractiveness. In BMI’s ments. Healthcare risks and rewards imports – of both pharmaceutical raw Q4/13 RRRs, the Asia Pacific region modernization and ratings tables for materials and finished products – will scores 53 out of 100, below Western facility expansion the pharmaceuti- rise following the recent downgrade Europe (67), but compares favorably should further cals industry in of Egypt’s credit rating. Nevertheless, against Americas (51), Central and support this in- each country, as in the longer term, Business Monitor Eastern Europe (52) and Middle East creasing demand, well as specific still expect steady growth of both val- and Africa (42) regions. The indica- ues and volumes, as the market’s un- tors used to assess the attractiveness derlying characteristics – including of a pharmaceutical market are now growing population and gradually visible, improving the transparency of improving access to facilities – pro- the rating system and enabling the mote its development. identification of regional or group outperformers across single indica- tors. © Jezper – Fotolia.com www.businessmonitor.com

6 • Regions & Locations Guide 2013 www.chemanager.com FINDING THE RIGHT PARTNER IS NOT A MATTER OF CHANCE. At CHEMPARK things come together that belong together.

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European Chemical Industry Parks 2.0 How to Sustainably Increase the Competitiveness of European Sites

Global Perspective — Future con- cepts of a competitive chemical industry landscape — including European and in particular Ger- man chemical industry parks — require a holistic analysis and as- sessment of local investment and Christoph Dr. Mikhail - Fotolia.com Bagusat Tanja © operating conditions in an inter- Behrendt, Meilikhov, Project Manager, national context. Senior Consultant, Scopein Scopein

Based on benchmarking results of chemical sites worldwide, six major fields of action have been defined to sustainably increase the competitive- ness and attractiveness of chemical production investment and operating conditions at European chemical in- dustry parks. Figure 1 shows the benchmarking results on an aggregated regional level per site-success-factor with cor- responding regional specifics and characteristics.

Actions to Increase Competitiveness

The outlined fields of action address the most decisive factors and areas for a continuous successful local chemical production. Figure 2 shows the fields of action and the respective On the other side, successful man- limited, in Asia as well as in the Mid- 3. Availability and Cost Levels of recommendations. agement of the “Energiewende” in dle East. Raw Materials Germany can provide major advan- Nevertheless, the demographic de- The analysis of the availability and 1. Energy Costs and Availability tages, such as lower production costs velopment and the inherent risks for a costs of raw materials at different Eu- Chemical parks in Europe exhibit sig- and innovation for the chemical in- critical pool of skilled labor in Europe ropean chemical parks shows an effi- nificant competitive disadvantages in dustry, as well as represent a unique have to be addressed by focused ac- cient interconnection of the single terms of energy costs compared with successful role model for other indus- tions of governments, labor unions chemical parks by pipeline networks. production sites in the Middle East trial countries. and chemical companies themselves. This guarantees the required perma- and other regions in proximity to low- The aging population and the linked nent supply of raw materials. priced energy sources. 2. Demography and Availability of scarcity of needed personnel with spe- However, the current development For instance, German producers Qualified Personnel cial qualifications require chemical of raw material prices (especially for are primarily charged by legal obliga- European chemical industry parks of- companies to pursue internal demo- petrochemicals) increases the pres- tions within “Energiewende,” a pro- fer optimal conditions when it comes graphic analyses of their own employ- sure on European chemical produc- ject established by the German gov- to the availability of qualified labor. ees’ age and qualification structures. tion sites. The exploration of shale ernment to develop renewable energy Only at American chemical sites can This helps to prevent shortages and gas fields in the U.S. already shows sources and completely deactivate nu- chemical production companies information losses through targeted initial effects on investment decisions clear power plants. In order to dimin- equally benefit from high education development and education measures of chemical enterprises that are aim- ish the migration of complete value and skill standards. for their own employees in-house. In ing to establish additional production chains from Germany to other coun- In comparison, labor costs at addition, the education of specialists capacities in American production tries, caused by future investment de- chemical production sites in Asia are in dual studies offers attractive op- sites. Therefore, for European chemi- cisions, it is important to maintain the substantially lower. However, the tions to companies to optimally posi- cal parks it is important to secure the established exemption clauses for en- availability of skilled chemical em- tion themselves in a labor market ex- raw material supply to prevent a per- ergy-intensive production companies. ployees is in most cases strongly pected to run short in the future. manent competitive disadvantage.

8 • Regions & Locations Guide 2013 www.chemanager.com Europe

4. Chemical Industry Park Strategy The success of this ambitious pro- justing during the critical phase of cussion between representatives of The model “Chemical Industry Park” ject will provide significant competi- the realization of ambitious targets both sides, i.e., the government and with its comprehensive and inte- tive advantages for Germany and for set by the German government is the companies. grated offerings of site services and Europe. The independence from fossil highly important and can only be infrastructure is a predominant guar- energy sources realized by the estab- achieved by precise and transparent 2. Demography and Availability of antee for the high competitiveness of lishment and development of renew- management. In particular, the de- Qualified Personnel chemical production at the European able energy sources will generate in- mand for mid-term planning security The link between educational facili- and especially German chemical novation edge compared with other of energy-intensive companies should ties and the producing companies in sites. Nevertheless, clearly defined regions. However, permanent read- be addressed by a constructive dis- Europe, for example in the chemical, chemical industry park strategies and positioning with continuous site de- velopment initiatives cannot be found at all European and German chemi- cal sites and offer room for improve- ment. 5. Innovation Power and Cutting-Edge Zofingen – Value Chains Over the last decades the close net- work of universities, research centers and industrial research laboratories Your Future has secured the high innovation standards in Europe. Promotion and development of cutting-edge technol- Location ogies (power-to-gas, utilization of CO2 in synthesis, etc.) are directly in- terconnected with the preservation of competitiveness of the whole region on the global market. Actually, there is a trend for inte- gration of different value chains on the same production site. This inte- gration process allows realizing fur- ther existing synergies. In the future, One of the world’s most significant life-science clusters is located in North- the emerging “cutting-edge value western Switzerland. Make Siegfried Pharmapark in Zofingen your future site for chains” will be the main reason for the devel opment and production of APIs and finished dosage forms. Siegfried competitive production in Europe Pharmapark provides a comprehensive range of services and the necessary space compared with other regions, such for your activities. Zofingen disposes of sufficient land reserves, is centrally as the Middle East or Asia, since the located and well connected to national and international transportation infra- quality and know-how of the chemi- cal products are the most influenc- structure. ing factors of customers’ buying de- cision. You benefit from For further information – Siegfried’s cGMP laboratories and a well-proven cGMP please contact: 6. Investment Incentives and Taxes Brigitte Albisser compliance system approved by the authorities in the Head City Marketing The tax burden in combination with United States, Europe and Switzerland Kirchplatz 26 the minimal investment incentives 4800 Zofingen, Switzerland compared to the incentives at Asian T +41 62 745 71 78 – IT and HR services tailored to your needs F +41 62 745 71 74 or Arabian chemical sites leads to a brigitte.albisser@zofingen.ch substantial disadvantage for upcom- – Siegfried as your outsourcing partner for the development ing new capacity investments at Eu- and production of active pharmaceutical ingredients and Peter Gehler Member of Executive Committee ropean and especially German sites. finished dosage forms Siegfried AG New plant investments have to prove Untere Brühlstr.4 economic viability with twice-as- – Proven pharmaceutical service providers such as Bilfinger 4800 Zofingen, Switzerland T +41 62 746 11 44 large tax burdens without any further Industrial Services for maintenance and SHE requirements, F +41 62 746 11 03 tax relief offered. and EBM AG for supply of Pharmapark tenants [email protected]

– Business-friendly Swiss legislation, liberal labor market, www.siegfried.ch modest tax burden and excellent infrastructure Recommendations per Field of Action – International business environment 1. Energy Costs and Availability The search for answers regarding the – Northwestern Switzerland provides skilled labor that is high energy costs at European pro- professionally qualified for the life science industry duction sites sets Germany in focus of the observation, where the manage- ment and the success of the “Ener- giewende” by the national govern- ment can generate the right impulses for the future.

www.chemanager.com Regions & Locations Guide 2013 • 9 Europe

automobile and heavy metal industry manage coordinated activities in or- sectors, guarantees a high, industry- der to increase the competitiveness of oriented qualification degree of em- chemical production in Europe. ployees in the future. This strength has to be further leveraged on a na- 5. Innovation Power and Cutting-Edge tional and pan-European level. How- Value Chains ever, especially small and medium- The analysis of the European re- sized companies (SMEs) have to be search landscape shows that many proactively supported when facing collaboration projects involving in- the demographic development and dustry and academic facilities fail be- the linked risks of shortage of quali- cause of the high discrepancy of the fied personnel. expectations expressed by each Here, the labor unions play a key stakeholder. This gap can be bridged role. On the one side, they have to only by an open dialogue of both sensitize the companies. On the other sides. Political representatives can side, they could effectively support the take over the facilitator role. The companies during the execution of main goal is to establish a prolific company-related demographic analy- base for collaborative activities by ses and the elaboration of company- trustful interaction and impartiality specific concepts for personnel devel- that would lead to a formation of opment and information transfer. Fig. 1: Site success factors in an international comparison (extract) strong partnerships. Such an envi- Furthermore, Europe has to bene- ronment can substantially increase fit more from being an attractive tar- the innovation power of an entire re- get for qualified labor immigration. stakeholders among the companies by the professional association of gion. The shortage of qualified personnel and political representatives. chemical parks within the German Additionally, the setup of innova- in certain regions could be proac- Especially German chemical parks association of the chemical industry tive networks on existing production tively approached by immigration provide critical input in the form of (VCI). These activities should be ap- sites for an effective integration of policies and measures. regional activities such as Chem­ plied for the generation of appropri- different companies should be funded Cologne, CeChemNet, ChemDelta Ba- ate role models for further European by governmental programs instead of 3. Availability and Cost Levels of Raw varia and ChemSite for the preserva- production sites as well as for par- solely concentrating on intensive pro- Materials tion of competitiveness of Europe-wide ticular regions. Established role mod- motion of research institutes that are In Europe, many national initiatives chemical production. Additional ac- els will contribute and secure an effi- focusing on “pure” basic research in aim to improve raw material supply. tivities are organized and managed cient grouping of interests and self-elected research fields. Those are primarily focused on the very regional improvement of the fi- 6. Investment Incentives and Taxes nancial conditions of the supply pro- As a response to the optimal tax con- cess and the establishment of com- ditions, in particular at Asian chemi- petitive prices. Chemical parks cal sites, European and German po- install national networks to develop litical bodies have to consider aligned the existing pipelines for better ac- pan-European, national as well as lo- cess to feedstock resources. Those cally focused investment incentives activities happen without a unified beyond tax advantages. controlling mechanism on the Euro- Concerted actions as part of a pean level. long-term and comprehensive indus- The urgent issues of the security trial policy for the respective regions of feedstock supply should be ad- and chemical sites have to support the dressed by a concerted Europewide settlement of new chemical produc- approach that eliminates the existing tion capacities beyond sole mainte- drawbacks compared with other re- nance investments, through dedicated gions, especially the U.S. and the Mid- governmental support programs and dle East. One of the most important optimal regulative conditions. Crea- and urgent issues is the decrease of tive support measures and tax incen- the already existing handicap in pro- tives in the field of training and fur- motion of cutting-edge technologies ther education represent alternatives for long-term feedstock security, for to pure financial incentives to chemi- example the “fracking” technology for cal companies in the course of a well- the exploration of shale gas fields. balanced industrial policy.

4. Chemical Industry Park Strategy The positioning and further speciali- Conclusion and Outlook zation of fragmented value chains of particular chemical parks in a re- Comparing competitiveness of world- gionally developed network should wide chemical industry parks leads to further be improved. The company- different fields of action for European overlapping integration of value chemical sites for focused and sus- chains in a chemical park as well as tainable development. This addresses in a regional production cluster re- not only the parks themselves but quires an extensive management of different standpoints by various Fig. 2: – Selected fields of action to increase competitiveness Continues Page 11 ▶

10 • Regions & Locations Guide 2013 www.chemanager.com Europe

Competitiveness of Swiss Industry at Risk? The Swiss federal government’s “En- comparison to the consultative pro- nesses are to be relieved of the re- ergy Strategy 2050” could jeopardize posal. However, Scienceindustries be- quirement to pay the surcharge, at the competitiveness of Switzerland’s lieves that the massive increase in the the cost of the rest of the Swiss econ- exporting industry, according to Sci- cost-covering feed-in compensation omy. Most of industry will not be ex- enceindustries, the Swiss Business system surcharge endangers the empted from it. At a time when the puts the Swiss export industry under Association for the Chemical, Phar- competitiveness of Swiss industry. Swiss Franc is strong, each additional further unnecessary pressure, Scien- maceutical and Biotech Industries. Only a few energy-intensive busi- increase in the price of electricity ceindustries said. Even though the final energy con- sumption targets remain ambitious, the Federal Council has now recog- nized the complexity involved in a re- construction of the Swiss energy sys- tem in the Dispatch relating to «Energy Strategy 2050» published in September 2013. Scienceindustries welcomes these implementation measures, which are more realistic in Our location. ◀ Continued Page 10 also the basic regulative conditions Your advantage. for chemical investments and produc- tion in the region. The variety of fields of action is the result of the large number of site success factors that are evaluated by the chemical com- panies during their investment deci- sion process. The major challenge — besides the interpretation of the benchmark- ing results, the conclusion of the ma- jor fields of action and the formula- tion of recommendations — is the implementation of actionable meas- ures. The implementation requires a concerted initiative by the chemical companies, the political representa- tives and the various interest groups, such as the labor unions and the em- ployers’ association. Furthermore, it needs a European perspective that extends beyond the single corpora- tion and national perspective in order to secure and strengthen the mid- to long-term competitiveness of Euro- pean chemical production in an inter- Where national competition. new ideas can grow. Authors: Infrastructure + innovation = a location with a future Christoph Behrendt, Project Manager, Scopein Manage- Pharmaserv operates the Behringwerke location with a professional facility ment Consultants; and Dr. Mikhail Meilikhov, Senior management. This is where you will fi nd companies from the fi elds of pharma- Consultant, Scopein Management Consultants, Duessel- ceuticals and biotechnology with around 5,100 employees. The location is of interest to both established companies as well as start-ups. A good infra- dorf, Germany structure, a concentration of know-how and the service-oriented environment produce synergistic effect – and a location with a future.

Contact: Christoph Behrendt Tel.: +49 211 730 6220 www.behringwerke.de [email protected]

Dr. Mikhail Meilikhov Pharmaserv GmbH & Co. KG Emil-von-Behring-Straße 76 Tel.: +49 211 730 6220 35041 Marburg (Germany) [email protected] Phone: +49 (0)6421 39-14 www.scopein.de

www.chemanager.com Regions & Locations Guide 2013 • 11 Europe

The Lacq Gas Basin, a Model Industrial Reconversion

France — With the support of the French government and local com- The model indus- munities, three enterprises — Total, Sobegi and Arkema — have invested trial reconversion pro- ject will sustain eco- more than €154 million in Lacq Cluster Chimie 2030, a project to trans- nomic activity and protect form the Lacq platform into a center of manufacturing excellence. In No- employment in the Lacq Basin. The new gas treatment unit will vember 2013, French Prime Minister Jean-Marc Ayrault inaugurated a produce at low flow the gas remain- new gas treatment unit for the project. The new facility is the corner- ing in the Lacq field for another 30 years, supporting local industry for stone of the industrial redeployment of the Lacq site located in south- the long term. The project is designed western France in response to the depletion of the natural gas field. to supply manufacturers on the plat- form with cost-competitive power, steam and sulfur feedstock daily. © fotomek - Fotolia.com The Lacq Gas Field was discovered in sands of jobs. For six decades, new In addition, it consolidates the 1951 and reached peak production in industries, such as fine chemicals, bi- competitiveness of the Lacq platform whose role is to encourage projects to 1970 with a capacity of 33 million cu- oenergy and carbon fiber, emerged and makes it even more attractive to create, acquire and grow start-ups in bic meters per day, meeting one-third and grew in Lacq, creating perma- new investors, such as Japan’s Toray. Total’s host regions in France, also of French demand. In a few short nent jobs. Today, the basin counts The worldwide leader in carbon fiber works to draw new businesses to the years, the surrounding Béarn farm- around 8,000 jobs — as many as in its manufacturing is undertaking a ma- platform. land became the “Lacq Basin,” an in- heyday in the 1970s — even though jor capital project on the site. In addi- dustrial hub that generated thou- only 3% of its reserves remain. tion, Total Développement Régional, http://developpement-regional.total.com

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21. Jahrgang · 16. März – 12. Juni 2012 Die Zeitung für D ie märkte D er chemie unD life sciences

Chemiekonjunktur Chemikalien Produktion

Branche erwartet 2012 globales Chemiedistributeure stellen Single-Use-Technologien sind Wachstum von 4 %, Dynamik in sich den Herausforderungen mit in der biopharmazeutischen Schwellenländern bleibt hoch Optimismus und neuen Ideen Produktion auf dem Vormarsch Seite 6 Seiten 16–20 Seite 23 6/2012 www.triplan.com Verstärktes Denken in June

Wertschöpfungsketten fotolia.com | Ihr Universum im Engineering. Dechema will mit neuer Struktur das Netzwerk über Branchengrenzen hinweg intensivieren

Besuchen Sie uns auf der ACHEMA in Frankfurt a.M. vom 18.–22. Juni, ie Dechema Gesellschaft für chemische Technik und Biotechnologie hat versammlung zustimmungspflichtig Halle 9.2, Stand B28. und wir haben ein einstimmiges Vo- sich eine neue Struktur gegeben. Mit der Ausgründung der Dechema tum für die Umstrukturierung erhal- D Ausstellungs-GmbH und der Übergabe des Karl-Winnacker-Instituts an ten. Das zeigt, dass wir gegenüber die Stiftung Dechema-Forschungsinstitut wurde die Neustrukturierung Anfang den Mitgliedern sehr überzeugend deutlich machen konnten, dass die Chemicals Production 2012 vollzogen. Dr. Michael Reubold und Wolfgang Sieß sprachen mit Dechema- neue Struktur viele Vorteile hat. Zu Specialty chemicals make soccer New concepts and technologies Geschäftsführer Prof. Dr. Kurt Wagemann darüber, inwieweit die strukturellen den Vorteilen für den Verein gehört, The newspaper for The dass er sich seinen gemeinnützigen balls faster and pharmaceuticals for energy and resource-efficient Veränderungen Auswirkungen auf die in Kürze beginnende Achema 2012 haben Aktivitäten ohne Einschränkungen chemical and TRICAD MS®: more effective. manufacturing processes. werden und wie die wissenschaftlich-technische Gesellschaft die sich durch die widmen kann, aber mit der Beteili- Die CAD-Lösung auf MicroStation. neue Struktur eröffnenden Handlungsspielräume nutzen will. gung an der Ausstellungs-GmbH nun Pages 8–11 life science markeTs Pages 13–21 auch in der Lage ist, von neuen kom- merziellen Aktivitäten zu profitieren. CHEManager: Herr Professor Wa- wirtschaftlichen Aktivitäten bei ge- www.VenturisIT.de gemann, die größte und bekann- meinnützigen Gesellschaften wie Und dabei gibt es keine InteresN ewsflow- teste Aktivität der Dechema ist die der Dechema kein Übergewicht ha- senskonflikte? Country Focus N ewsflow Achema, die weltweite Leitmesse ben dürfen. Und da ist es die übliche Germany is our featured country für chemische Technik und Bio- Vorgehensweise, dass man eine ei- Prof. Dr. K. Wagemann: Nein, wirin habenthis issue. The chemical pow- A Catalyst For Change? M&A-News: technologie. Werden Besucher und gene GmbH für solche Aktivitäten hier für eine saubere Trennungerhouse zwi- of Europe is host of the Commerzbank-Studie: Die un- Aussteller der Mitte Juni stattfin- gründet. Im Zuge der Diskussion schen den gemeinnützigen und den Achema 2012, the global flagship © julien tromeur sicheren Rahmenbedingungen denden Achema etwas von Neu- über eine Umstrukturierung haben wirtschaftlich orientierten Aktivitäten With the Integration of Rhodia, Solvay Strives to Become a Major Player in Chemistry conference and exhibition for che- werden zur größten Investitions- strukturierung der Dechema spü- wir uns auch Gedanken über die gesorgt. Wir haben uns ganz bewusst mical engineering and biotech- bremse für die chemische und ren? Zukunft des Karl-Winnacker-Insti- dafür entschieden, alle Kongress-, Prof. Dr. Kurt Wagemann, Geschäftsführer, Dechema pharmazeutische Industrie. tuts gemacht und die bereits früher Tagungs- oder Workshop-Aktivitätennology coming up June 18-22 in Combining Cultures – On try. We also want to be a model of innovation will play an important two companies’ assets we are al- Prof. Dr. K. Wagemann: Nein, Besucher diskutierte Überlegung, das Institut einschließlich der WeiterbildungFrankfurt. wei- Andspielt some – und of thedas mostist nicht nur im Be- essant, wenn wir z. B. neue Ausstel- sustainable chemistry. It is our firm role, certainly helped by the fact ready benefiting from purchasing Mehr auf Seite 6 ▶ May 11, 2012 Jean-Pierre Clamadieu und Aussteller der Achema 2012 zu verselbständigen, aufgegriffen. terhin nicht kommerziell orientiertpromising zu futurereich derconcepts Chemieproduktion for – wird lungsaktivitäten in anderen Ländern belief that chemistry has the abil- that the merged companies have synergies as well as cost efficien- werden nichts von der Umstruktu- Seit Februar stellt sich die Dechema behandeln. Diese bleiben imchemical Verein productionman sich andGedanken infra- machen kön- beginnen wollen. Dann istsucceeded die Ko- Christian Jourquin as CEO ity to find solutions for some of the very significant R&D resources. The cies that will contribute to EBITDA structure (e.g. the model of chemi- rierung merken. Die Veränderungen als ein aus drei Einheiten bestehen- bzw. im Institut, denn wir sehen die- nen, ob die Ausstellungs-GmbH ent- operation mit Partnern vorof Ort, the aber Solvay group, since the con- challenges that society faces. The remaining €400 million should be over the next few years. betreffen nur die organisatorischen des Gebilde dar: dem wissenschaft- sen gesamten Bereich, wo sichcal Leuteparks) haveweder been allein developed oder inzusammen mit auch mit deutschen Partnern, mit Solvay family shareholders strongly achieved through operational ex- Abläufe hinter den Kulissen. Der lich-technischen Verein Dechema, treffen und über wissenschaftlicheGermany as well.Partnern Aktivitäten entfaltet. denen wir zusammen in einensolidation neu- of Rhodia in last year’s third support management on this. They cellence. When the merger process is com- Achema-Kongress wird nach wie einem davon unabhängigen, von Inhalte diskutieren, als eine zentraleMore on Pages 13, 15, 16, 18, 19, 20, 21 ▶ en Markt gehen, wesentlichquarter einfa one- of Europe’s leading chemi- clearly believe that the integration pleted, what will the company’s vor von der Dechema organisiert, einer Stiftung getragenen selbstän- gemeinnützige Aktivität an. Es wird Die Dechema pflegt im wissen- cher. Wir werden künftig viel häufi- of Solvay and Rhodia should be a How will you achieve these targets, portfolio look like? cal players. The former Rhodia CEO also die Fachausstellung ist nun eine An- M&A News schaftlichen Bereich bereits inten- ger als es in der Vergangenheit mög- catalyst for change. especially in view of the recession- gelegenheit der Ausstellungs-GmbH. Die in Deutschland bestehende enge DuPont is sortingsiv internationale out bidders for its Aktivitäten und lich war, mit Organisationentook a seat on the Solvay board of di- ary tendencies in parts of Europe J.P. Clamadieu: I believe we already Wir haben gegenüber den Ausstel- Partnerschaften. Hat denn die zusammenarbeiten, die nicht den Verflechtung von akademischer und car paint unit. Four private equity How solid a company is the new and the slowdown expected in have quite a broad portfolio. A lern schon in den Ausschreibungs- neue Struktur darauf einen positi- gleichen Status als gemeinnützigerectors. CHEManager Europe asked firms are still in the race to buy the Solvay financially? China? recently conducted analysis has bedingungen auf die sich abzeich- industrieller Forschung findet man in ven Einfluss? Gesellschaft haben wie wir. Das wird Clamadieu about shareholders’ and enabled us to clearly assess the nende Entwicklung hingewiesen. automotive paint business and durch die Ausstellungs-GmbH we- vielen anderen Ländern nicht. J.P. Clamadieu: In 2011, Solvay and J.P. Clamadieu: There will certainly be perform ance of each individual Die Gesamtaktivität Achema gab have been givenProf. Dr. access K. Wagemann: to more Wir sind inter- sentlich leichter sein. management’s vision for the newly Rhodia together generated pro bumps in the road. But that’s the business and to identify growth en- jedoch für unsere Neustrukturie- digen Institut, und der Ausstellungs- keinen wissenschaftlichen Kongressdetailed financialnational information. gut vernetzt, The sowohl auf merged Belgian-French group. rung den wesentlichen Anstoß. GmbH, die den Verein Dechema und oder Workshop im Bereich dershort-list Aus- includeseuropäischer a consortium Ebene of über die ent- Globalisierung hat auch Einfluss forma sales of nearly €13 billion name of the game. I don’t expect gines. It shows that 90% of our sales die Stiftung Dechema-Forschungs- stellungs-GmbH geben. DieseBlackstone wird andsprechenden Bain Capital, Föderationen a pai- für Che- auf die Forschungslandschaft und and EBITDA of over €2 billion. the going to be easy but I also don’t are transacted in markets where we Inwiefern? institut als Gesellschafter hat und sich, so ist unsere Erwartung,ring neuen of KKR mieingenieurwesen,and LP-Onex, Carlyle für Biotechnolo- das Bildungswesen. Es gibtCHEManager zwi- Europe: Mr. Clama- Implementation of our new strat- think we will have to wait until 2016 are among the top three global play- die Achema-Ausstellung sowie an- Themen, vielleicht auch neuenand Regi Apollo.- Thegie undvalue für of Korrosion, the busi- als auch welt- schen Staaten einen immerdieu, häufi what- is your vision for the egy should put us in a position to to start experiencing growth. If you ers. Our three fastest-growing seg- Prof. Dr. K. Wagemann: Die Achema dere wirtschaftlich geprägte Aktivi- onen der Welt widmen. Sie wirdness ihrehas beenweit, estimated gerade as highhaben as wir z. B. das geren Austausch von Studentennew Solvay? increase EBITDA by 10% year-on- look at our Q4 2011 results you will ments now account for about half of war von Anbeginn an wesentlicher täten durchführt. Kompetenz im Ausstellungsbereich$4 billion. jährige Jubiläum unserer japani- und von Forschern. Sehen Sie für year in average to €3 billion by see that some businesses are far- our overall trading activity. J.P. Clamadieu: Our vision as one 2016. This is challenging, but in ing very well, and in fact did not Zweck des wissenschaftlich-techni- vielleicht auch Dritten anbieten. schen SchwestergesellschaftMore on Page 2 ▶ mitge- eine deutsche Gesellschaft die Not- schen Vereins Dechema und wurde Was bedeutet die neue Struktur für feiert. China ist ein anderes wichti- wendigkeit, dass man dieseof Inter the -world’s top ten chemical our view achievable. Around €600 see a crisis. While the targets are companies is to be a strong lead- million of the improvement should demanding they are by no means in der Vergangenheit von den Fi- die Mitglieder der Dechema? Gibt In welchen Regionen sollenInvestments denn ges Stichwort. Dort haben wir mit nationalität weiter fördert? nanzbehörden als gemeinnützige es Auswirkungen, von denen sie neue Aktivitäten begonnen wer- der Achemasia eine Messeaktivität,Jean-Pierre Clamadieu, CEO, Solvay er in the reshaping of this indus- come from organic growth. Here, unachievable. After combining the Continues Page 11 ▶ Mitsui Chemicals and Sinopec Aktivität anerkannt. Jedoch hat sich profitieren? den? die wir in enger Kooperation mit Prof. Dr. K. Wagemann: Definitiv! Man have set up a 50-50 joint venture diese Einschätzung mittlerweile ge- chinesischen Partnern durchführen. kann sich heute als wissenschaft- ändert und die Achema-Ausstellung Prof. Dr. K. Wagemann: Uns war es wich- Prof. Dr. K. Wagemann: Zu dento Regio build- a $315Wir millionpflegen plant auch that sehr gute Bezie- lich-technische Gesellschaft nicht wurde bei der letzten Betriebsprü- tig, diesen Umgestaltungsprozess nen, die uns interessant erscheinen,will produce hungen ethylene-propylene- zu unserer Schwesterorga- ausschließlich auf deutsche Mitglie- fung als wirtschaftliche Tätigkeit frühzeitig in Richtung der Mitglieder gehören definitiv Südamerikadiene eben terpolymer- nisation (EPT). AIChE The plant,in den USA. Darauf der stützen. Wir haben mittlerweile qualifiziert. Dadurch mussten wir zu kommunizieren. Die Änderung war so wie die Golfregion. Überallto be dort, located wird in China‘s die neue Shanghai Struktur keinen Ein- doch eine ganze Reihe von auslänLearning- From The Cliff uns entsprechend anpassen, weil die ja letztlich auch durch die Mitglieder- wo Prozessequipment eineChemical Rolle Industryfluss haben. Park, will Sie havewird primär inter- dischen Fachkollegen, die sich hier capacity to produce 75,000 tons in Deutschland engagieren und wir of EPT a year and is set to start können frohAs darüber the Global sein. Ich Pharmaden- Business Changes, NNE Pharmaplan Bridges the Gap Between Countries commercial operations in the first ke, wir sind auf diesen Austausch quarter of 2014. mit dem Ausland angewiesen. SABIC invests in capacity expansion Pharma Engineering – While the ply engineering and project man- ness in emerging markets, especially Wie beurteilen Sie denn die For- for its polycarbonate (PC) multiwall agement. India and China. However, there is upheaval in theschungs- pharmaceutical und Arbeitsbedingungen indus- sheet business at its manufacturing a solid growth in Central Europe für diese ausländischen Fachkräf- facility in Vadodara, India. The com- try has brought with it a lot of prob- How has the market changed over as well. There are many mid-sized Top-Executivespany will open agesucht? state-of-the-art te in Deutschland? Es wird immer lems, one sectorwieder that is bemängelt,benefiting from dass wirthe Defizi last decade?- companies that aren’t affected by production line to help meet rising patent expiries; these companies Als eine der führenden Personalberatungen für die Chemie wirt- te haben, weil andere Länder at- customer demand in the region for the overhaul is pharma engineering. : If I had to pick one el- are robust and forward-looking, and schaft unterstützen wir seit über 30 Jahren er folgreich Konzerne traktiver sind. G. Mølgaard the high performance Lexan Ther- Companies such as NNE Pharmaplan ement that has led to significant they are excellent to work with. und Mittelständler beimoclear der Bese multiwalltzung von sheet Führungspositionen. products Prof. Dr. K. Wagemann: Da drehtchanges sich, over the last decade, then Sie vertrauen auf unsereused Bran for roofing chen exper and tise, glazing unsere in the intensiven are the ones pharma companies call persönlichen Kontakte und auf unsere individuelle Betreuung. glaube ich, das MeinungsbildI would mitt -pick the patent cliff. This Are requirements different in building & construction sectors. on when theylerweile. are looking Wir to haben expand natürlich cliff hasnach been building up over the emerging countries? Ashland has responded to strong to new regions,wie build vor new die facilitiesSituation, or dasslast manche 10 years; we’ve been through demand for polyvinyl pyrrolidone US-amerikanische Universitätmegamergers einen that transpired so G. Mølgaard: Most companies, re- (PVP) by adding new low-viscosity, revamp existingWeltstatus ones. Brandi hat. Schuster companies could have access to gardless of location, are looking to pharmaceutical-grade Plasdone spoke to Stefan Berg of NNE Pharma- yet another blockbuster. Now, most upgrade their facilities. These com-

ntgelt bezahlt · D 12264 e e ntgelt · DPAG· · Pressepost Weinheim · PF 11 05 64 69469 PVP capacity at its manufacturing companies have realized that this is panies have been around for many plan, general manager of the Central facility in Calvert City, Kentucky, ▶ Die Fortsetzung sowie das Kurzinterviewnot mit theInstituts­ way of the future, and this years, and they know that keeping Erfahren Sie mehr über unsUSA. unter Ashland www.barfeld.de currently oder produces 0208/45045-0 Europe region, anddirektor GertProf. Dr. Mølgaard, Michael Schütze überhas die beenStiftung the catalyst for change the status quo won’t be enough to

Wiley VCH Wiley PVP also at its manufacturing site Dechema­Forschungsinstitut lesen Sie auf Seite 12. corporate vice president of strategic within the pharma industry. This is remain competitive in the future. in Texas City, Texas. truly the end of the blockbuster era, Gert Mølgaard Stefan Berg For example, China just brought in development, about the opportunities + + + Alle Inhalte sind Online verfügbar unter www.chemanager-online.com + + + www.gitverlag.comand we need to forget about it and NNE Pharmaplan NNE Pharmaplan new GMPs at the beginning of 2011. ahead and the company’s strategy for look forward at the opportunities Looking to Russia, they want to build ahead. G. Mølgaard: Pharma companies are G. Mølgaard: Yes, there is currently a their own independent pharma in- a worldwide footprint. diversifying, which is something we large demand for innovative solu- dustry, and they expect the stand- How has the patent cliff specifi- like, because it gives us the oppor- tions within biotech, such as single- ards to be the same as in Western CHEManager Europe: What are the cally affected your business? tunity to showcase our offerings. use technology, prebuilt modular Europe. This means that Western biggest challenges facing pharma We provide services in biotech, facilities and the ability to revamp knowledge and standards are in engineering in 2012? S. Berg: Pharma companies have sterile manufacturing, medical and upgrade existing facilities. For high demand there. come to the realization that they devices, diagnostics, automation, us, this underscores the importance We’re also seeing a lot of in- S. Berg: Challenge is probably not the have to make some changes – go- manufacturing IT, process ana- of working with our customers long novation coming out of emerging right word. There are a lot of op- ing into mergers or restructuring lytical technology, etc. At the same term in order to get to know them markets. There is a lot of interest portunities to be had in pharma en- their own businesses, for example. time, because we focus on pharma well. in getting into biosimilars and even gineering; our customers are strong This in turn creates work for us. and biotech, we have very specific the creation of new drugs based on and in the mood to invest. If there Every merger, every restructuring know-how. Market globalization is another existing drugs. is any challenge at all, it is finding is good news for us. Pharma com- hot trend. skilled workers. But even that is not panies know that their business will Do you think the growth we’re cur- What regions are becoming more an issue everywhere, but rather in be completely different in the future rently seeing in biotech is sustain- G. Mølgaard: It’s clear that our market interesting for your customers? specific disciplines, such as in sup- than it is now. able long term? is shifting toward increased busi- G. Mølgaard: Besides China and India, there is a lot of interest in Brazil, and that certainly won’t be the end of it. We will get into more countries Loading made easy as we see the market needs coming;

ntgelt bezahlt · 78719 e ntgelt · DPAG· · Pressepost Weinheim · PF 11 05 64 69469 but we are also careful to not take – safely on too many countries at once. www.rs-seliger.de Continues Page 14 ▶ Wiley VCH Wiley

chemanager-online.com/en

You can fi nd us online, too! www.CHEManager.com

www.gitverlag.com

12 • Regions & Locations Guide 2013 www.chemanager.com Advertorial

Chemicals and Plastics in North Rhine-Westphalia

As Germany’s leading chemical global players and small and me- ­location, North Rhine-Westphalia dium-sized enterprises (SMEs). Be- sides the old-established traditional can look back on a long tradition. firms, globally operating corporations With its dense transport network such as Altana, BASF (Cognis), Du- Pont, Evonik Industries and Lanxess and renowned research landscape, profit from evolved infrastructures the state offers ideal conditions for and sophisticated logistics that North Rhine-Westphalia has to offer as a investments and innovations in chemical location. Situated in the the chemical and plastics sectors. heart of Europe, the state provides fast connections to destinations all over the world and guarantees, for example, the supply of raw materials In North Rhine-Westphalia the chem- via extensive pipeline networks. In ical industry is one of the largest and addition, the regional initiatives highest-selling employers: Over 400 ChemSite in the Ruhr Metropolis and chemical companies employ over ChemCologne in the Rhineland sup- 90,000 people, who most recently port investors in their search for suit- generated sales of 48.5 billion euros. able locations and partners. The Of the 20 highest-selling German choice is large: With twelve chemical only conventional chemical products sectional character the plastics in- chemical corporations, six are based parks such as Chempark Leverkusen such as pesticides or detergents, but dustry in North Rhine-Westphalia is in Europe’s No. 1 chemical region: or Chemiepark Marl, North Rhine- also polymer materials and environ- seen as an innovation driver in the North Rhine-Westphalia. Westphalia is also Germany’s No. 1 ment-friendly materials made from fields materials and production pro- Today’s global concerns in the region in this respect. Around 50 per- carbon dioxide. The large companies cesses, as well as for products in chemical industry such as Bayer and cent of all employees in the North concentrate mainly on the production practically all spheres of life. Numer- Henkel already started producing on Rhine-Westphalian chemical industry of chemical precursors, while the ous institutes such as the Plastics In- the Rhine and Ruhr about 150 years work at chemical parks. SMEs concern themselves with the stitute Lüdenscheid and the Fraun- ago. The state’s chemical industry is The key production areas of the manufacture of end products. hofer Institute for Environmental, now characterized by a mixture of chemical industry in the state are not Around 70 percent of the sub- Safety, and Energy Technology Umsi- stances manufactured in the chemi- cht in Oberhausen form the basis of cal industry go into industrial further North Rhine-Westphalia’s plastics ex- processing. This demonstrates the pertise and work on sustainable high- strong influence of the chemical in- performance materials. For example, dustry on technical progress in other the Fraunhofer Institute Umsicht has sectors: It sets a whole chain of inno- developed polymers which can repair vations in motion. Research and de- themselves. Bayer MaterialScience velopment play a correspondingly im- operates a pilot plant for the extrac-

portant role in the chemical industry tion of plastic from CO2, and at RWTH — and enjoy ideal conditions in North University lizard skin serves re- Rhine-Westphalia. New resource-con- searchers as a model for extremely serving, environment-friendly materi- low-friction materials. als are developed in over 100 study Whether it is petrochemicals, courses, numerous renowned insti- pharmaceutical or polymer materials tutes such as the Jülich Research — in the chemicals and plastics state Center and company research facili- North Rhine-Westphalia the industry ties. This knowledge from research enjoys optimal conditions for invest- and practice is bundled in the state- ments and innovations of all kinds. wide cluster Chemie.NRW. The tight Discover even more key beneftis networking of chemical companies for you and your company. Interested? with research institutes, universities and user industries strengthens the innovative capability of the industry. The chemical industry’s reputa- tion as an innovation engine is due in particular to its close ties to the plas- tics industry, as these two branches of industry go hand in hand in the field of plastics production. This is where the foundations for technological pro- gress are laid: With its marked cross- www.nrwinvest.com

www.chemanager.com Regions & Locations Guide 2013 • 13 Emerging Markets

Risky Business Nuances of Insurance in Emerging Markets

Country-Specific Challenges — sites. The main motive for such invest- luctant to notice the value of project and to enforce their own risk- The chemical industry in Asia and ments is the huge sales potential and protective measures. This problem is management standards. the proximity to chemicals-hungry in- aggravated by the fact that in China, “It is therefore common practice Latin America is growing fast. A dustrial consumers. Low production production sites and subsidiaries are to hire a local Chinese consulting firm large number of European corpo- costs play a major role as well. often designed as joint ventures. familiar with the climatic and topo- Therefore, ownership issues are fre- graphic conditions and experienced rations has established produc- quent and are complicated because in dealing with the local authorities tion sites in countries such as How To Ensure Resilience the legal situation is sometimes am- and with import regulations,” said biguous or vague. Ralf Kuperjans, senior account engi- China and Brazil or is planning to From the perspective of a risk man- “This brings us to some crucial neer at FM Global. do so. Others have made con- ager, China is a whole new set of chal- questions: Who has the technical and commercial lead in the building pro- tracts with suppliers from these lenges to production and supply chains. Nigel Todd, assistant vice ject? Who is to bring in the necessary Flood And Wind markets or entered joint ventures. president at commercial property in- technical expertise?” Todd said. surer FM Global, points out that Chi- The difficulty for European corpo- China has many flood-prone regions, nese business partners are often re- rations then is to keep control of a and many areas are subject to strong For risk managers this means new challenges, as country-specific risks such as natural hazards, a nontrans- parent legal system and cultural influ- ences often don’t get enough attention. Companies that remain unprepared may face severe losses from business interruptions. According to a survey by the Ger- man Chemical Industry Association (VCI), global demand for chemical products is expected to increase by an annual 4.5% until 2030. This growth is largely based on ever-in- creasing demand from emerging markets, particularly in Latin Amer- ica, China and Southeast Asia. However, opening up new markets requires a precise strategy with a thorough risk-management program customized for each new site abroad. This program should include the se- lection of a safe location, the timing of the market entry and the type of en- terprise. New plants, joint ventures and suppliers in countries such as China and Brazil are subject to very country-specific risks. Thus, both a successful entry and sustainable suc- cess are based on accurate risk knowl- edge and the corresponding risk miti- gation through protective measures.

China Calls The Tune

One of the most rapidly growing mar- kets is China. Since 2010, the Middle Kingdom has become the world’s larg- est chemicals producer. Today there is a large number of collaborative pro- jects between European and Chinese corporations. Some companies have moved entire business units to Chi- naor decided to build new production

14 • Regions & Locations Guide 2013 www.chemanager.com Emerging Markets

winds and heavy rainfall. As China is Brazil took fifth place, behind China, Index a country of large distances, many the United States, Japan and Ger- chemical companies have established many. For European chemical com- American Chemistry Council (ACC) 26 Ho Chi Minh City Export Processing most of their sites in the same indus- panies, Brazil has thus become an Bahrain Economic Development Board 18 and Industrial Zones Authority (HEPZA) 21 trial district. However, this also in- important trading partner and place Bahrain International Investment Park 18 Infraserv Höchst Outside Back Cover creases the risk exposure. In the to relocate production. Risk manag- BASF 14, 18 KPMG 16 event of a natural disaster, all sites ers should be aware that when enter- Bioindustrial Innovation Centre Sarnia 25 Kraft Foods 18 BusinessMonitor International 6 Management Consulting Chemicals 20 will be affected at the same time and ing this market a number of new CeChemNet 8, Inside Back Cover McKinsey & Company 22 no fallback plant may be available. risks demand consideration as well. ChemCologne 8 Ontario Ministry of Economic Development “If companies have access to the ChemDelta Bavaria 8 and Innovation Inside Front Cover, 24 necessary local knowledge, they will ChemSite 8 NRW.Invest 5, 13 most likely fare better than their Security Firms to Protect Sites China Petroleum and Chemical Invest in Ontario 24 competitors,” Kuperjans said. “It may Industry Federation 20 Invest in Pahang 21 help to know, for instance, that for When going to Brazil, European com- Columbia University 4 PharmaServ 11 spiritual reasons Chinese architects panies may also be confronted with Currenta 7 SABIC 16 prefer fancy roof constructions, even higher levels of theft and violence FM Global 14 Saxony-Anhalt Investment for industrial facilities. While this spe- against their property. For this reason, General Electric 18, 24 and Marketing Corporation Inside Back Cover cial roof design is intended to keep Ralf Kuperjans recommends hiring se- German Chemical Industry Scopein Management Consultants 8 the happiness in the building, this is curity firms. It’s important as well to Association (VCI) 8, 14 Siegfried Pharmapark Zofingen 9 risky business. The roofs provide a make a wise decision when selecting Gulf Cooperation Council (GCC) 16, 18 Tamkeen 18 large contact surface for the wind, so the location for a new site. FM Global’s Gulf Petrochemical & Chemicals Total 12 they are frequently uplifted by gusts.” risk engineers can offer advice not Association (GPCA) 16 World Economic Forum (WEF) 3, 4, 18 only regarding safety and security but also with natural hazards exposure in The Human Factor mind. Businesses should also focus on Imprint creating and maintaining secure sup- But risks also arise from language bar- ply chains. If only one of the local sup- Publisher: Original Articles: Wiley-VCH Verlag GmbH & Co. KGaA Specially identified contributions are the riers and a lack of knowledge about a pliers has to stop production, it often A Company of John Wiley & Sons, Inc ­responsibility of the author. Manuscripts country’s culture. In many countries in becomes necessary to procure materi- GIT VERLAG should be addressed to the editorial of- Southeast Asia, European risk manag- als from abroad if no alternative sup- Boschstr. 12, 69469 Weinheim, Germany fice. Instructions for au­thors may be re- ers may find that their counterparts plier is at hand who can compensate Tel.: +49 6201 606 0 quested from the ­publishing company. will show courtesy toward foreigners the demand in time. In Brazil, a com- We assume­ no liability for unsolicited, by refraining from asking questions pany will then face high import duties. Publishing Director submitted manuscripts. Reproduction, about things they don’t understand or Dr. Heiko Baumgartner including ­excerpts, is permitted only will answer in the affirmative what- with the permission of the editorial office ever the question. However, the agreed Support Your Local Fire Brigade Product Management and with citation of the source. The pub­ Dr. Michael Reubold lishing company is granted the exclusive, tasks may later not be performed de- Tel.: +49 6201 606 745 space and content restricted right to ar- spite the ostensible consent. Such mis- When it comes to infrastructure, ad- [email protected] bitrarily use the unmodified work/edito- understandings may entail serious ditional investments are often neces- rial contribution for all purposes for itself consequences, for example regarding sary as well. Media Consultants and for businesses that have an interest fire protection or safety at work. “In Brazil, large companies often Thorsten Kritzer in the publishing company as defined by Nigel Todd therefore recommends support the local fire brigades to help Tel.: +49 6201 606 730 company law as well as to transfer the linguistic and cultural translators them buy the necessary equipment,” [email protected] right of use to third parties. This right of who know the country, the people and Kuperjans says. “This way, they en- use applies to both print and electronic their culture well. sure that the brigade is operational Corinna Matz-Grund media including the internet and data Tel.: +49 6201 606 735 banks/data media of all types. Country-specific differences also and capable of dealing with special [email protected] All names, designation, or ­signs in this is- become apparent when looking at emergency situations such as confla- sue, whether referred­ to and/or shown, technical requirements. Usually, local grations at industrial sites.” Jan Käppler could be trade names of the respective producers will offer alternatives to When transferring risk in Brazil Tel.: +49 6201 606 522 owner. those technical devices a risk man- and China by taking out industrial in- [email protected] ager knows from Europe and sell surance, it is important to know that Printed by Druckzentrum Rhein-Main them at the same price or for even a local insurance partner must be in- Team Assistant Alexander-Fleming-Ring 2 less. Most of the time, however, the volved at all times. An international Beate Zimmermann 65428 Rüsselsheim Tel.: +49 6201 606 764 low price will come at the expense of insurance company should always [email protected] quality, which may later lead to mal- take the lead in co-insurance models Printed in Germany functions or technical errors. to ensure that no financial shortfalls Freelancer occur in the event of loss. Miranda Kennedy To avoid losses such as business Title – Copyright Brazil On The Rise interruptions, a country-specific risk Reader Service: © Sergey Nivens - Fotolia.com management definitely pays off, par- Silvia Amend © Jörg Hackemann - Fotolia.com In Brazil, the chemical industry is ticularly in emerging economies such Fax: +49 6201 606 700 © mitay20 - Fotolia.com gaining importance as well. The vast as China and Brazil. [email protected] © Alexander Raths - Fotolia.com © Wolfgang Jargstorff - Fotolia.com and resource-rich country with a Production Managers © jogyx - Fotolia.com fast-growing population is experienc- Contact: Christiane Potthast © Franck Boston - Fotolia.com ing lasting growth. In 2013, the chem- Nigel Todd Claudia Vogel (Advertising) © industrieblick - Fotolia.com ical industry contributes more than FM Global Oliver Haja (Layout) 10% of the gross domestic product of Frankfurt, Germany Ramona Rehbein, Elke Palzer (Litho) the manufacturing sector. Among the [email protected] top chemicals producers in 2013, www.fmglobal.com

www.chemanager.com Regions & Locations Guide 2013 • 15 Middle East

Chemicals in the Middle East The Drive Toward Downstream Expansion

Leveraging Feedstocks’ Advantage — Behind the Arabian Gulf petro- Arabia, followed by Qatar and UAE chemical and chemical industry lies three decades of exceptional growth: will drive the growth, expected to add 40.6, 10 and 8.3 million tons respec- leveraging advantaged feedstocks, economies of scale, integration and tively of additional capacity by 2020. world-leading process technology to build a vibrant, influential and highly Gulf producers will be competing more intensively to successfully cap- profitable petrochemical industry that is the envy of many other regions. ture downstream demand in the emerging markets. Gulf producers will continue to focus on Asian mar- With almost 30% of the world’s oil re- states outrank the key emerging Vir Lakshman, Rita Duran, kets, particularly China and India — serves and 23% of all natural gas re- chemical producing countries of head of Chemicals senior manager, markets driven by high demand for serves, the Gul Cooperation Council China, India and Brazil. and Pharmaceuti- Chemicals and middle class products. (GCC) states – made up of Saudi Ara- Over the decades, the GCC has de- cals, KPMG Pharmaceuticals, The GCC petrochemical industry is bia, Bahrain, the United Arab Emir- veloped talented petrochemical lead- KPMG expected to face several regional and ates (UAE), Oman, Qatar and Kuwait ers. Many of these CEOs have astutely global challenges in coming years. – have benefitted from compelling developed global positions through than $367 billion in developing its in- On the global level, shale gas dis- cost economics and the export of low- acquisitions and alliances, and have frastructure including petrochemicals. coveries in North America are reinvig- cost petrochemical commodities to made the GCC a pivotal player in the After Saudi Arabia, Qatar has the next orating North American petrochemi- rapidly growing Asian markets. global petrochemical sector. largest GCC petrochemical plans. It cal producers. In 2017, when the U.S. Unlike other petrochemical pro- The GCC petrochemicals produc- plans to finance more than $10 billion capacity starts coming on stream, a lot ducing regions, the GCC is not co-lo- tion capacity reached 127.8 million worth of petrochemical projects next of low cost product will be supplying cated on a major market. It is ideally tons in 2012. The petrochemical indus- year and up to $34 billion on projects Asia as well. Furthermore, the devel- situated close to either Europe or try in the region is currently concen- in the five years thereafter. opment of coal-based technologies Asia but it is unique in its dependence trated in Saudi Arabia. It is the leading The growth of the region’s petro- such as methanol-to-olefins (MTO) in on its supply chain. The infrastruc- petrochemical producer across the re- chemical industry has been on the Asia may also fundamentally influ- ture has been developed in a rela- gion and home to SABIC, a global top- back of significant cost-advantageous ence their import needs. These new tively short period of time during 10 chemical producer by revenue. feedstock, compared with other re- sources of supply will affect price and which petrochemical exports had Saudi Arabia accounted for about two- gions such as the U.S. and Europe. As profitability margins. GCC producers built up dramatically. thirds of the region’s production ca- per ICIS, Middle East crackers enjoy will face a strategic dilemma — stay in From an embryonic beginning in pacity with annual petrochemical out- about 46% cost advantage relative to Asia, competing alongside the U.S., or 1981, the first exports of polyethylene put reaching 86.4 million tons in 2012. U.S. ethane crackers. switch their export focus to Europe. were shipped from Qatar followed by The region is continuing its focus In a post-stimulus world, geopoliti- Saudi Arabia and Bahrain in the 1980s. on developing its infrastructure, sup- cal tensions are high with greater The region has longstanding rela- ply chain and logistics as capacity lim- Moving Downstream risk of protectionism and uncertain tionships with downstream produc- its are being reached. A series of in- confidence. This volatility plagues the ers in Europe, Japan and the U.S. Ad- vestments are underway throughout As per estimates by Gulf Petrochemi- certainty sought by financial inves- ditionally, on the World Bank’s Ease the region. Over the next decade, Saudi cal & Chemicals Association (GPCA), tors. Furthermore, attempts to rein in of Doing Business 2013 Index, all GCC Arabia alone intends to invest more the annual petrochemical production inflation in overly stimulated econo- capacity in the GCC region is set to mies could lead to a hard landing in reach 191.2 million tons by 2020 some of the largest chemical markets (growing by 50% from 2012). Saudi in the world.

16 • Regions & Locations Guide 2013 www.chemanager.com Middle East

less accessible, refinery/petrochemi- cal integration more essential and prevalent, added value more essential, decisions more complex and markets less certain. But the region has enduring strengths that will secure its leader- ship role in the next decade — strong cash reserves, refinery/petrochemical integration, good infrastructure, feed- stock advantages and proximity to both growth markets in Asia and es- tablished markets in Europe. Addition- ally, the region has long-standing rela- tionships with downstream producers in Europe, Japan and the U.S. to bring the required technology to bear. With the rapid expansion of its ed- ucated, urban youth, demographic pressures are increasingly making Declining Cost Advantage Securing Downstream Technology must be taken to retain key manage- successful economic diversification ment teams. An advantage GCC pro- and downstream expansion a neces- On the local front, the biggest threat The GCC chemical industry can exer- ducers may have over their competi- sity for the Gulf petrochemical indus- the industry is expected to face is that cise one of several options to gain the tors in other emerging chemical try. The challenge has been set. of declining cost advantage due to the essential technology it needs for de- markets is their legacy of deal-making switch from light to mixed/heavy velopment. in Western markets and ability to move feed, resulting from the gas shortage. Joint ventures: Gulf producers can quickly in M&A auction processes. Authors: As per a report by ICIS, this can lead trade access to feedstocks for propri- Incentivize foreign investments: Vir Lakshman, head of Chemicals and Pharmaceuticals to a 24% disadvantage to U.S. ethane etary technology. An example of this Special incentives (such as tax holi- Germany, KPMG, Düsseldorf/Germany crackers. The feedstock scarcity in is the rubber plant SABIC-Exxon Mo- days and lower tax rates) could be of- Rita Duran, senior manager, Chemicals and Pharmaceuti- the Middle East region has forced the bil joint venture announced in August fered by GCC states to foreign inves- cals Germany, KPMG, Düsseldorf/Germany regional chemical producers to 2012 for a combined investment of tors with leading edge technologies. switch their strategies to focus on $3.4 billion. The JV is to develop a These must be designed to compete Contact: downstream manufacturing projects. 400kt/y synthetic rubber manufac- with investment-attractive countries Vir Lakshman The region will continue to expand turing complex in Jubail, Saudi Ara- such as China. KPMG downstream with clusters playing an bia. The project is scheduled to be on- Developing new technology: This Düsseldorf, Germany increasingly important role in the line by mid-2015 and is expected to is the least feasible option as it takes Tel.: +49 211 475 6666 manufacturing of specialty chemicals. deliver halobutyl rubber, ethylene time, which given the current rapidly [email protected] Conversion parks will consume and propylene diene monomer (EPDM), changing market is simply not avail- www.kpmg.com add value to locally produced petro- carbon black, styrene butadiene rub- able. chemicals. The downstream expan- ber (SBR) and polybutadiene rubber. So a new era has begun for the pet- sion is considered to be less cyclical Technology licensing: Advanced rochemical producers in the and is expected to provide stable re- technology can be licensed from for- region — strategic imper- turns in the long run. eign competitors, such as the SABIC atives are changing, The industry also is expected to agreement with Asahi Kasei and Mit- feedstocks are face a severe shortage of skilled la- subishi Chemical to produce 200,000 bor, such as professional technolo- mtpa of acrylonitrile. gists, despite the area’s growing Buying and replicating: GCC compa- population, a large part of which is nies could buy and replicate technol- younger than 25. According to ogy via acquisitions. The acquisition of GPCA, petrochemicals account for European-based Borealis and Ca- about 6% of the total workforce in nadian based Nova Chemicals by the GCC region and the region’s pet- Abu Dhabi investors is an ex- rochemical companies will need to ample of this strategy. More approach skills shortage and strive recently, in October, Oman Oil to focus on developing a young tal- Company announced it will ent base. acquire Oxea (Germany), Historically, the industry has been one of the largest global commodity-focused, therefore access manufacturers of Oxo to advanced technology and know- chemicals, from the private how remains a challenge. Producing equity firm Advent Interna- downstream derivative products is tional. With this acquisition, heavily dependent upon developing Oman aims to become a verti- or acquiring the requisite technology cally integrated global chemi- and know-how. cal leader in the downstream in- GCC producers pursuing the dustry with Oxea bringing its downstream strategy will need to technology and expertise to Oman. A identify and gain access to key tech- large part of technology and IP rests nologies, or develop them locally. with management, so particular care © freshidea - Fotolia.com

www.chemanager.com Regions & Locations Guide 2013 • 17 Middle East

Bringing Innovation and Industrialization to Life Bahrain is an Attractive Base for Accessing the GCC Market

Gateway to the Gulf - Bahrain had not been on the map of many inves- tors from the chemical industry until December 2012 when German chemical giant BASF inaugurated a new plastics additives facility in the kingdom situated off the Saudi Arabian coast in the Arabian Gulf. But for international companies looking to access the trillion dollar market of the Gulf Cooperation Council (GCC) states the country is an attractive base to set up business.

In the Gulf countries, the state-owned and technology. The mission is to mately 25% of the nation’s GDP. Other oil and gas companies constitute the bring innovation and industrializa- sectors are thriving too, including the beginning of the value chain by ex- tion to life. downstream sector, business support tracting natural resources. The first Bahrain was the first Gulf nation to services, manufacturing, and logistics wave of downstream development discover oil – and later the first to di- to name but a few. began with additional state-owned versify its economy away from oil. Al- companies moving into refining, pet- though oil and gas reserves are being rochemical industry, and other basic depleted, the oil sector still accounts Foreign Investment Flow industries. Today, Gulf countries are for about a quarter of the country’s making significant efforts to achieve GDP of about $27 billion. But besides Bahrain witnessed significant foreign sustainable, long-term industrializa- the oil and gas industry, today, the fi- investment flow throughout 2012 and tion on the basis of science, research nance sector contributes to approxi- into 2013, with 40 international busi- terms of production costs, compared nesses from North America, Europe with Eastern Europe, but also has the and Asia as well as the Middle East relevant sales markets. region setting up their operations in the Kingdom. This was mainly due to the direct outreach activities carried Access to a Trillion Dollar Market out by the Bahrain Economic Devel- opment Board (EDB). The public The smallest of the six member states agency is focusing on target economic of the Gulf Cooperation Council (GCC) sectors such as manufacturing, logis- is one of the best places from which tics and transport services as well as to access this rapidly growing market other sub-sectors, in which the King- for a number of reasons. It was the dom offers significant strengths. eighth most economically free nation The Kingdom’s skilled bilingual lo- in the world, according to the Eco- cal workforce and low cost of doing nomic Freedom of the World: 2013 business mean that it is a natural Annual Report published by the home for firms looking to invest in Fraser Institute. the region. In fact, Bahrain is highly EDB chief executive Kamal bin interesting as a production location, Ahmed said: “Bahrain’s ranking in especially for European investors, as the top ten freest economies in the BASF’s new plastics additives facility in Bahrain. it is not only extremely favorable in world for the second year running is

18 • Regions & Locations Guide 2013 www.chemanager.com Middle East

a testament to more than a decade of economic reforms that have been un- dertaken to improve prosperity in the Kingdom. The results of which have been strong economic growth, par- ticularly in the non-oil economy, more jobs for Bahrainis and an open, at- tractive and supportive business en- vironment from which companies can access the GCC market, worth in ex- cess of $1.4 trillion.” Other recent reports have also high- lighted Bahrain’s economic strengths. Earlier this year, Bahrain was ranked first place in the Middle East and 12th place worldwide in the 2013 Wall Street Journal / Heritage Foundation Economic Freedom Index.

Economic Vision 2030

Such a bright performance is bound to further expand, in fulfillment of Bahrain’s ambitious Economic Vision 2030 of attaining a knowledge-based economy, enhanced innovation, pro- ductivity, competitiveness, human re- Office building at the Bahrain International Investment Park (BIIP). source development, fairness and sustainability. Among the govern- for intellectual property”, said Frank and the Bahrain Economic Vision cated assistance with all corporate ment’s strategic initiatives is a drive Fasdernes, business management di- 2030. and human resource formalities. to support private enterprise, in par- rector for BASF’s plastic additives Khalid Al-Amin, board member of Quality facilities, offices and factory ticular small and medium-sized busi- business for Eastern Europe, Africa Tamkeen and of the Bahrain Cham- units are offered with long leases, nesses. and Western Asia. “Because we were ber of Commerce and Industry ex- and competitive land rentals in an Bahrain’s business fundamentals able to have 100% ownership of the plained that the government- environment that is professionally are strong and economic stability is Bahrain project we have been able to launched initiative has made zoned, landscaped and managed. secure. The Kingdom’s business sec- assume greater control over the pat- significant progress since its estab- BIIP is situated in a superb loca- tor is already supported by the most ented technology which runs the lishment in 2006 in providing high- tion with excellent connectivity and productive national workforce in the plant,” he continued. quality staff for investors such as access to both the Bahrain Interna- GCC together with the Kingdom’s BASF employs more than 750 peo- Kraft Foods, General Electric, the In- tional Airport and the new port. The strong infrastructure. The latter max- ple in the region, and the new plant dian polyester company JBF or BASF. park enjoys direct motorway access imizes its strategic location as the provides skilled employment for a Since international investors create to Saudi Arabia via the 25 km Saudi- gateway to the Gulf and has been number of Bahrainis. “It is always jobs for local citizens, he “would like Bahrain King Fahd Causeway and boosted by new developments such as BASF’s goal to provide employment to see more multinationals investing will enjoy the same connectivity to the Bahrain Logistics Zone (BLZ) and for local citizens wherever we oper- in Bahrain.” Qatar via the Qatar-Bahrain Friend- the adjacent Khalifa Bin Salman port. ate, and in Bahrain 70% of the plant ship Bridge after its completion. workforce is local. In fact, good qual- Besides chemical manufacturing ity labor availability was another im- International Investment Park and formulation projects from a wide Liberal Business Environment portant factor in choosing Bahrain as range of sectors have been approved an investment location,” explained Bahrain, along with the rest of the for the park including food products, Bahrain is a muslim country, business Harald Kroll, BASF’s Dubai-based re- Gulf, continues to rapidly expand. medical technology, household prod- law, however, is based on western gional managing director. One of the major business / industrial ucts, electronics devices, and packag- models. Thus, Bahrain provides a lib- Both BASF executives make the projects in the country is the Bahrain ing materials. eral business environment. Overseas point that the engagement with the International Investment Park (BIIP). investors benefit from 100% foreign local authorities, from the industry BIIP is a landmark development in ownership for most categories of busi- and commerce ministry to the EDB Bahrain positioned as a location for Moving Forward ness with no restrictions on repatria- and BIIP management, left a positive high-quality foreign direct invest- tion of capital, profits or dividends. and lasting impression. ment and export-orientated domestic Bahrain is committed to sustaining This was a major reason for BASF projects. The 247 hectare business and strengthening its core business to choose the Bahrain International site is divided into 6 zones, each zone fundamentals: a highly skilled work- Investment Park (BIIP), an industrial Well-Educated Workforce targeting a different sector such as force, stable and transparent regula- zone located near the country’s big- services and knowledge-based activi- tion, an open business environment gest seaport for its new customer- The national agency that is in charge ties, high-tech manufacturing and as- and sustainable growth, offering a vi- specific antioxidant blends plant, of developing the skills of Bahraini sembly or process industry. brant market and attractive base for which is based on proprietary tech- citizens is called Tamkeen. The initia- The park offers unique incentives accessing the wider GCC market. nology. “It was important for BASF, tive also tasked with supporting small including 100% foreign ownership of which issues more than 1,000 patents and middle private sector enterprises companies; 0% tax with a ten-year Contact: every year worldwide, to select a lo- (SMEs) is one of the cornerstones of guarantee; special Customs services; Bahrain EDB, Manama, Kingdom of Bahrain cation which offers strong protection Bahrain’s national reform initiatives no recruitment restrictions and dedi- www.bahrainedb.com

www.chemanager.com Regions & Locations Guide 2013 • 19 Asia

Spoiled for Choice Chemical Parks and Site Selection in China

Local Know-how — Establishing local chemical production in China is essential for long-term success of multinational chemical companies, whether to improve access to the local market or to © Franck Thomasse - Fotolia.com Thomasse © Franck leverage lower labor and invest- Kai Pflug, Management ment costs. Consulting – Chemicals

Therefore choosing the right produc- forcement of environmental regula- tion location is an important issue for tion leaves established chemical chemical companies, independent of parks as the only viable long-term op- whether they already have local in- tion. But how to find the best loca- vestments. Increasingly, stricter en- tion?

Table 1: Top 20 Chinese chemical parks as ranked by CPCIF Rank Name Province Foreign companies (examples) Domestic companies (examples) 1 Shanghai Chemical Economic and Technological Shanghai BASF, Bayer, Huntsman, Lucite GPCC, Shanghai Chlor-Alkali Chemical, Sinopec, Development Zone Shanghai Huayi, Tianyuan

2 Nanjing Chemical Industry Park Jiangsu BASF, BP, Celanese, DSM, Ineos, Oxea ChemChina, Nanjing Jinqi Chemical Group, Sinopec

3 Ningbo Petrochemical Economic & Technological Zhejiang AkzoNobel, Lanxess, LG, Mitsubishi Ningbo Heyuan Chemical, Sinochem Development Zone

4 Huizhou Dayawan Economic and Technological Guang-dong BASF, Clariant, Shell Chung Shun Chemical, CNOOC, Zhongchuang Development Zone Chemical

5 Jiangsu High-tech Fluorine Chemical Industrial Park Jiangsu Arkema, Daikin, DuPont, Solvay 3F, Huada Chem, Huayi Chemicals

6 Quangang Petrochemical Industrial Park Fujian ExxonMobile, SaudiAramco Fujian Petrochemical, Meizhou Bay Chlor-Alkali Industry, Fuqing Jiangyin, Sinochem

7 Yangzhou Chemical Industry Park Jiangsu Dairen Chemical, Praxair Oxiranchem, Yangzhou Chemical

8 Changshou Economic and Technological Develop- Jiangsu BASF, BP, Evonik, Mitsubishi, Sinopec CNPC, Sinopec ment Area

9 Jiangsu Yangtze River International Chemical Indus- Jiangsu Ashai, DIC, DOW, DowCorning, Feixiang Chemicals, Glory Chemical Industry, trial Park (Zhangjiagang) DuPont, PPG, Sumitomo, Wacker Zhangjiagang Yangtze River Petrochemical

10 Taixing Economic Development Zone Jiangsu AkzoNobel, SP Chemicals FuAn Chemical, Taixing Chemical

11 Maoming High-Tech Industrial Development Zone Guang-dong BASF Sinopec

12 Yushen Industrial Area Shaanxi Dow (in planning) Shenhua

13 Yangpu Economic Development Zone Hainan Sinopec

14 China New Chemical Material (Jiaxing) Park Zhejiang DICP, Jiahua Energy Chemical

15 Jilin Chemical Industry Circular Economy Pilot Park Jilin Evonik CNPC, Jilin Chemical Group

16 China Chemical Industry (Qinzhou) Park Guangxi Capital Success Chemical, Petrochina

17 Liaoyang Aromatic Hydrocarbon and Chemical Liaoning Evonik Petrochina Fiber Base

18 Tianjin Nangang Industrial Zone Tianjin Air Liquide, Dow, Rosneft, SABIC, Shell CNOOC, Datang, Petrochina, Sinochem, Sinopec 19 Dongying Port Economic Development Zone Shandong Zhenghe Petrochemical

20 Cangzhou Coastal-port Economic and Technological Hebei Cangzhou Dahua Development Zone

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Fortunately, the search has al- mainly concerning input factors/ ready become substantially easier in costs, those concerning the sales of the last 10 years as more profession- the products and those more nar- ally managed chemical sites have rowly affected by the conditions at a opened. According to the China Petro- specific site. leum and Chemical Industry Federa- Not all of these criteria may be rel- tion (CPCIF), by the end of 2012 there evant for every company, and some- were 141 major chemical industry times additional criteria need to be parks. Of these, 29 are on the state added. It is also important to decide on level and 112 are at the provincial weightings for the different criteria, as level. More than 9,000 enterprises the site eventually selected will most with annual sales of more than RMB likely be a compromise between differ- 20 million (approximately €2.5 mil- ent factors pointing in different direc- lion) are within these parks. Fig. 1: Criteria for selection of suitable chemical production site in China tions. For example, Shanghai as a site The CPCIF has recently published alent. These include a lack of unified Evonik chose Jilin as a production site has several advantages regarding fa- a ranking of the top 20 chemical macroscopic planning, limited secu- for hydrogen peroxide mainly because cilities and market proximity but cer- parks in China. The criteria include rity measures regarding access to the 90% of the production is delivered to tainly is not a low-cost production site. economic competitiveness, infra- parks and inadequate emergency re- Jishen Chemical Industry as a raw ma- In addition, negotiations should in- structure, environmental protection, sponse systems. This leaves some terial for propylene oxide production. itially be started with several sites — safety and public recognition. Tab. 1 room for improvement, possibly in Criteria outside of the core chemi- not only to improve the negotiation shows this ranking along with exam- cooperation with Western site service cal industry can also have a major in- position but also as some chemical ples of foreign and domestic compa- providers such as Infraserv, Infracor fluence on site selection. Particularly parks particularly in the Shanghai nies active at the individual parks. or Currenta. for companies with a strong focus on area are getting more and more As the list shows, eastern China While the park ranking provides a R&D and the desire to combine the choosy and may not accept processes around Shanghai (i.e., Shanghai, Ji- good starting point for a chemical R&D and the production site, the cul- that are deemed to be dangerous, angsu, Zhejiang) is by far the region company looking for a suitable pro- tural infrastructure is highly relevant. polluting or low-value. with the most highly developed chemi- duction site, it is necessary to also Few highly trained Chinese scientists cal parks, and the region with the ma- take individual company needs into will be willing to move to a site in jority of foreign chemical companies. account and integrate them into a Guangxi province, which has led to Author: In fact, if anything, the CPCIF ranking project-specific criteria list. For ex- most of the R&D centers of multina- Dr. Kai Pflug, Management Consulting probably understates the situation — ample, some chemical sites need to tional chemical companies being es- some smaller chemical parks in east- be established in a way that guaran- tablished in the Shanghai area. Simi- ern China are probably more highly tees good access to raw materials, larly, the attractiveness of a site for Contact: developed than some of the parks in such as BASF’s selection of the some- expat workers depends on the exist- Dr. Kai Pflug the lower ranks of the list, which have what remote Korla in Xinjiang for its ence of an appropriate infrastructure Management Consulting — Chemicals been favored for political reasons. production of butanediol and polytet- for them and their families (e.g., in- Shanghai, China Particularly in the lower-ranked rahydrofuran. ternational schools). Mobile: +86 1368 187 3992 parks, some of the typical issues of Another obvious factor is the pres- Fig. 1 shows how these different [email protected] Chinese chemical parks are still prev- ence of a major customer on site. criteria can be grouped into those www.mc-chemicals.com

Vietnam Attracts High Investment Malaysia Fosters Industrial Parks

Vietnam’s industrial parks cludes Ho Chi Minh City. Specifically, China and Malaysia have estab- (IP) and economic zones the plan aims for the Southern KEZ lished two joint industrial parks. (EZ) have been attracting to push ahead in oil and gas explora- These government-to-government considerable sums in foreign tion and electricity generation. Al- initiatives are meant o further direct investment, according to though Vietnam began its oil and gas boost bilateral trade and investment. Dezan Shira & Associates, a special- exploration only a few years ago, The Malaysia-China Kuantan Indus- ist foreign direct investment practice. it has now become the third trial Park (MCKIP), to be built on 1,500 secure total investments of US-$24 Vietnam currently has 289 IPs in largest oil producer in South- acres, is located in the less developed billion by 2020. Its key business areas addition to 15 coastal EZs, plus 28 bor- east Asia. Malaysia Eastern Corridor, in the state include oil, E&E products and car der economic zones. Together, The South, a major contrib- of Pahang. component manufacturing. these zones have helped employ utor of national GDP, has been This industrial park is the twin Also in the state of Pahang, the Ge- over two million people through- designated as the leader in the in- project of the 13,600-acre Qinzhou beng Industrial Estate houses a world- out the country. The Vietnamese gov- dustrialization and modernization of Industrial Park (QIP) being built in class chemical and petrochemical in- ernment divides the country into three the whole country. Between January Guangxi Province of China. Investors dustrial zone. With four development key economic zones (KEZs) for which and September 2013, Ho Chi Minh taking up industrial land in Qinzhou phases totaling 8,600 hectares of land, economic development plans were City’s industrial parks and zones wel- are expected to be offered attractive it is strategically located only 5 km launched in 2004 with a vision to 2020. comed total FDI of US-$341.4 million, land prices, tax incentives and finan- from the Kuantan Port. The KEZs are the economic en- a year-on-year increase of 114%, ac- cial support. With excellent infrastructure and gines of Vietnam. The Northern KEZ cording to HEPZA, the city’s manage- Similarly, Kuantan is also ex- facilities, Gebeng Industrial Estate is covers eight provinces and munici- ment authority of industrial parks pected to offer investment incentives rapidly expanding to become the lead- palities including the country’s capi- and export processing zones. such as 5+5+5-year pioneer tax-free ing chemical and petrochemical hub tal Hanoi. The Central Key Economic status and generous capital allow- of the region. Zone covers four provinces and Da ances. MCKIP is estimated to cost Nang City. The Southern KEZ in- www.hepza.gov.vn US$806 million to develop. It hopes to www.investinpahang.gov.my

www.chemanager.com Regions & Locations Guide 2013 • 21 Asia

Doing Business the Indian Way Multinationals Must Adapt to Local Practices and Show Commitment to Succeed

The Next Level — Over the past 20 years, multinational companies have Innovating For India but to exit the market. Joint ventures made considerable inroads into the Indian market, but many have failed can be beneficial in some cases, but Multinationals are learning that they are not essential if a multina- to realize their potential. For multinationals, the key to reaching the next many different Indias exist within the tional regards India as a priority level will be learning to do business the Indian way, rather than simply subcontinent. The big differences — market. When joint ventures are nec- the haves and have-nots, languages, essary, multinationals should ensure imposing global business models and practices on the local market. literacy, and geography (including the that they have real management con- urban–rural divide) — make it diffi- trol and a clear path to ownership cult for a global brand to satisfy all of should that become necessary. the country’s consumers. Multina- tionals also face the challenge of low- cost local competitors. Strategic Partnerships This aspect of competition in India means that innovation is occurring Partnerships with Indian companies not only through localized products need not be limited to joint ventures and services but also in business but can also include strategic alli- models and processes. To strike a bal- ances with local players. For exam- ance between global brands and local ple, a global pharmaceutical com- positioning, multinationals can intro- pany established itself as a duce sub-brands or models with fea- stand-alone entity but developed tures suited to Indian needs. They strategic alliances with a local manu- could also work with local suppliers facturer in licensing and supplies for to reduce costs. Although many of the generic and off-patent segments. these ideas are not new, multination- This helped the multinational to enter als have been slow to implement India’s fast-growing market for low- them in India. The key is that custom- cost, easily accessible branded gener- ization has to be a game-changing ics and off-patent medicines. strategy rather than an incremental Winning in India requires an in- one: multinationals must aim to cut tense and concerted effort. The multi- costs by 60-80%, with just a 30% re- nationals need top leaders willing to duction in features. make a commitment to the Indian op- Many multinationals in India are stuck head of the Indian unit is experienced eration. They must adapt to the In- in a profitability trap characterized by and knowledgeable about the market dian consumer’s demand for innova- a lack of commitment to build country- and has a direct line of communica- Choosing the Right Entry Strategy tive, low-cost delivery systems and specific operations and management tion with the global company’s CEO. high value for money products, as systems. When expatriate company This direct connection to global man- One of the first and most important well as identify and implement an ap- heads are brought in, their efforts of- agement — combined with the ability issues for a multinational considering propriate ownership model. Finally, ten fall victim to short rotation cycles to make decisions on capital spend- doing business in India is ownership senior executives of these companies that inhibit the execution of long-term ing, products, and pricing — holds a structure. Multinationals that enter should not neglect the management strategy. One important differentiator local leader more accountable and the country on a stand-alone basis of influential local stakeholders, such is the ability to demonstrate a commit- facilitates the execution of strategy. generally fare better than those that as regulators and activists. ment to India through the economy’s Local empowerment should ex- use Indian partners to create joint inevitable cycles and volatility. Policy tend beyond the country head to ventures. Most global companies that makers and local entrepreneurs have lower levels of management, which opted for them have exited the Indian Authors: long memories, and “state visits” by can help drive innovation and entre- market, while some have purchased Vimal Choudhary, Consultant, global CEOs and chairmen are not suf- preneurialism on the ground and de- the stakes of their partners or estab- McKinsey New Delhi ficient if a company doesn’t follow crease times to market for new prod- lished majority shareholdings.Multi- through on its commitments. ucts. But structure is not enough. nationals that choose joint ventures Alok Kshirsagar, Director, Multinationals need the right people as their entry vehicle into India think McKinsey Mumbai — especially in middle management. that a local partner can better navi- Empowering The Indian Organization Given the vast array of opportunities gate the market’s complexities and Ananth Narayanan, Principal, available in India and its relative manage regulatory issues. There is McKinsey Chennai Empowering local management is shortage of management talent, mul- some truth to that idea, but in prac- also critical for attracting and retain- tinationals have had to revise their tice, joint ventures often tend to em- ing talented staff. Many multination- models significantly. With continuing phasize short-term performance over als are moving toward the creation of professionalization of Indian compa- long-term goals, long-term commit- Contact: a strong Indian business unit and, in nies, the country’s managers have ment, and an alignment between the Vimal Choudhary the process, moving away from func- less incentive to work for a branch of interests of the global and local part- McKinsey, New Dehli, India tions or global products as the pri- the multinationals, which must look ner. Without management control and Tel.: +91 124 661 1000 mary axis of governance. These com- beyond short-term tactical measures a clear path to ownership, global [email protected] panies are investing in top talent: The to attract high-quality people. companies may have no alternative www.mckinsey.com

22 • Regions & Locations Guide 2013 www.chemanager.com NEW NAME EXTENDED RANGE HIGH-LEVEL QUALITY

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A Game Changer New Digital Pathology System for Cancer Diagnoses Set up in Ontario

Technological Transformation — In this digital era, it comes as a shock to discover that critical diagnoses of life-threatening diseases such as cancer still depend on what a pathologist sees on a glass slide under the lens of a microscope. This process, which also involves paper files, has not evolved very much in more than a century, but soon it will change radically. © Speedfighter - Fotolia.com © Speedfighter

Luigi Gentile, Dr. Terrie Romano, executive director, Consul, GE’s Pathology Centre Economic Affairs of Excellence, Ontario GE Healthcare Canada

“Pathologists make the definitive di- In spring 2013, both Health Can- Top 5 Reasons to Invest in Ontario agnosis in the continuum of cancer ada and regulators in the European 1. Among the most generous R&D tax incentives care,” said GE Healthcare’s Luigi Union approved the GE Omnyx inte- Our R&D tax incentives are some of the most generous among industrial- Gentile at GE’s Pathology Innovation grated digital pathology system (IDP). ized countries. When tax credits are factored in, a $100 R&D expenditure Centre of Excellence (PICOE) at the “It’s a game changer,” said PICOE’s can be reduced to an after-tax cost of about $57 for large companies to as MaRS facility in Toronto. “It’s a pivotal Gentile. “It makes it much easier and low as $39 if you’re a small business. And nonrefundable tax credits can be step, but the process involves an faster to connect different types of carried back three years or forward 20 years. analog, glass-and-paper system when specialist expertise and develop the all around it the health-care environ- best medical solution for that individ- 2. Lower business costs ment is going digital.” ual patient.” Canada offers a lower business-cost environment for life sciences compa- While digital imaging has been At the core of the Omnyx IDP sys- nies than the U.S., Germany, Italy, Australia or Japan, according to KPMG’s used by pathologists since the 1980s, tem is an enterprisewide IT network Competitive Alternatives 2012. Ontario’s marginal effective tax rate (provin- slow scanner speeds, huge file sizes architecture. For the first time, pa- cial and federal combined) on new capital investment dropped from 33.7% and overburdened IT networks within thologists can access, analyze and in 2009 to 18.7% in 2010 and will continue to fall to 16.3% by 2013. hospitals meant that viewing, sharing share diagnostic images with col- and storing the images was costly leagues and specialists — no matter 3. A research powerhouse and slow. It also made consulting with where they are physically. This means With seven of the top 10 Canadian research hospitals, Ontario is the fourth- a geographically distant specialist that the diagnostic needs of patients largest biomedical research center in North America. difficult. in remote locations can be better At the same time, medical re- served by the expertise of specialized 4. Faster time-to-market searchers were making break- pathologists in larger medical centers. Ontario has launched a number of programs to accelerate the successful throughs in the identification of many Key to achieving regulatory ap- adoption of life science discoveries. Some examples: Excellence in Clinical different types of cancers, the recog- proval for the IDP system was a beta Innovation and Technology Evaluation (EXCITE) is a groundbreaking pre- nition of genetic predispositions and test of the system at Toronto’s Uni- market evaluation process for medical technologies that can streamline the evaluation of the effectiveness of versity Health Network and the Tim- their adoption by health systems. Clinical Trials Ontario is an independent different treatments. The problem mins and District Hospital (TDH), a nonprofit organization that is coordinating the development of a stream- was this ever-increasing wealth of regional health-care center in a min- lined approach to conducting multicenter clinical trials in Ontario while en- specialized digital knowledge was not ing community 700 km north of To- suring the highest ethical standards for patient safety. easily accessible by the pathologists ronto. making the diagnoses. 5. Critical mass of companies and talent Ontario has a broad and innovative life sciences sector that includes some Collaborative Innovation 1,100 firms. We have six medical schools including the University of To- Removal of a Bottleneck ronto, one of the largest in North America. Our 44 universities and colleges “The question was could we manage produce more than 30,000 graduates a year in mathematics, engineering That digital-analog bottleneck was fi- TDH’s entire pathology workload re- and sciences. nally removed through a clinical trial motely from Toronto? And the answer by a multidisciplinary team at PICOE was yes,” reported PICOE’s Gentile. www.investinontario.com collaborating with medical and IT “The test period involved more than specialists at the University Health 3,000 patients and over 20,000 slides. All figures are in Canadian dollars unless otherwise noted. Network, a leading center for re- We were able to focus the expertise of search and advanced patient care. 27 different specialized pathologists

24 • Regions & Locations Guide 2013 www.chemanager.com North America

on the leading edge of GE’s corpo- ratewide “healthymagination” drive to find innovative solutions to global healthcare needs. “Innovation is about understand- ing critical challenges around the world and drawing on the best exper- tise needed to create the solution,” said Peter Robinson, vice president and general manager, GE Healthcare Canada. “PICOE is not about throwing technology at a problem. This is about changing the basic business model to consistently drive better results in pa- tient care and health-care services.” GE Healthcare’s groundbreaking IDP system is now available across Canada and Europe. Interest is build- ing quickly. “We’ve been very fortunate to work with a very innovative team here,” Gentile said. “The expertise of these medical researchers has made it possible for us to have a global im- pact on improving patient care.”

© Invest in Ontario Contact: The MaRS facility in Toronto. Dr. Terrie Romano Ontario International Marketing Centre to help diagnose the medical issues of innovation both here and in Tim- nership between GE Healthcare and Canadian Consulate, Munich, Germany patients in Timmins. Our success is a mins.” clinical leaders in Toronto, with fi- Tel.: +49 89 21 99 57 60 credit to the quality of science and PICOE was established in 2011 as nancial support from the Ontario gov- [email protected] the collaborative nature of medical a result of a US-$17.2 million part- ernment. PICOE’s mandate is to stay www.investinontario.com

Turning Sarnia Green Hybrid Chemistry Center Sprouts from Petroleum-Based Cluster

Renewing Possibility — What is green chemistry? Simply put, it is chem- As the plan came together a num- icals made from renewable resources. It is not a new concept. In 1941, ber of things were implemented. The Sarnia-Lambton Research Park was Henry Ford unveiled a “field-grown” plastic car. Ford came up with the established in partnership with West- idea in the Depression, and then World War II enhanced the need for ern University; the Bioindustrial In- novation Centre (BIC) was granted plant-based plastics. However, the end of World War II opened access to Murray McLaughlin, Centres of Excellence for Communi- oil supplies globally and created the dawn of the petrochemical age. Bioindustrial cation and Research (CECR) funding; Innovation Centre and Bioindustrial Innovation Canada (BIC) played an investment and facili- For the next 60 years, the petrochem- leader. We have the resources to create tainable chemistry, based on foster- tating role in establishing bioindus- ical industry drove significant global a sustainable hybrid chemistry indus- ing partnerships and developing syn- trial companies. growth and an expanded chemistry try. The resources are agriculture, for- ergies from having all the right As we look back from 2013, the industry. But cost, health, environ- estry and waste materials. The knowl- individuals come together within in- progress is visible thanks to the ef- mental and security concerns, along edge is within Canada’s universities dustry, colleges, universities and local forts of many people in the commu- with managing the use of oil, are cre- and industries or in other areas of the governments — to support the hybrid nity. BIC and the Sustainable Chemis- ating a shift to sustainable technolo- globe that need our natural resources. chemistry cluster. try Alliance (SCA) have 14 investments gies and products. Transformation Nothing happens without a plan, between them; the pilot facility has and development of a hybrid chemis- though. Sarnia’s plan came together three tenants doing pilot and demon- try industry is setting the standards Green Cluster over a 10-year time frame. It was de- stration-scale development (Wood- for the 21st century. signed to work with and build off of land Biofuels, GreenCore Composites This puts Canada in a unique posi- In Sarnia, Ontario, a true cluster is the petroleum-based cluster that and KmX Technologies). New busi- tion to become a global chemistry growing in the area of green and sus- needed to be maintained. nesses, such as Methes, S4C02 and

www.chemanager.com Regions & Locations Guide 2013 • 25 North America

BioAmber, are also getting estab- shared pilot plant facility that opened lished. in 2010, focused on sustainable feed- There are two industrial parks fo- stock as an alternative to petrochemi- cused on attracting green and sus- cals — things like soybeans, corn, tainable businesses to Sarnia. These switchgrass and algae that will create parks are managed by Lanxess and greener products. I am excited about TransAlta, and they both are very in- the emerging bio-cluster in Sarnia- terested in new startups with a sus- Lambton and the business connectiv- tainable focus. ity collaboration provides. There is BioAmber is the first full-scale tremendous expertise in this region, plant for bio-based chemicals in Can- and by leveraging ideas, forming ada, and it is building at the Lanxess strategic partnerships and working Industrial Park in Sarnia, Ontario. together, there is no doubt we’ll con- Why Sarnia? Because BioAmber tinue to distinguish ourselves as a vi- found a community that wanted to brant center for bio-industry. work with it to ensure success. We recognize how important the Sarnia-Lambton is becoming a site shift was from a purely petrochemi- location for the bio-based chemical cal industry to that of a hybrid chemi- industry and green energy (solar) in- cal industry — a combination of dustry. Others in the region are Sun- green chemistry (bio-based) and pet- cor Ethanol, Enbridge (solar energy) rochemicals. Because of this shift, and Greenfield Ethanol. Not surprisingly, a consequence of systems, shipping channels and a consumers will have a choice of these efforts is that there is signifi- deep-sea port. In addition, there is cleaner products. The shift is a true cant local investment in the commu- brainpower, the hum of human en- positive for Sarnia-Lambton and one Green Jobs and Local Investment nity. According to George Mallay, gen- ergy, and dedication to addressing that just made sense: The facilities to eral manager of the Sarnia-Lambton the needs of the future by developing make this change happen are already Sarnia-Lambton is known for playing Economic Partnership (SLEP), the unique, sustainable, alternate energy in Sarnia, but the benefit is that our to its strengths and is characterized evolution of Sarnia-Lambton became supplies, agri-food technologies and community, the county, the city and as a leader in green energy jobs. important with the onset of globaliza- bio-based chemicals. This makes Sar- the petrochemical industry are all That’s not a bad reputation to have — tion and the harsh reality facing the nia a true hybrid cluster. highly supportive of this initiative. and one that proves a region can be once-vibrant petrochemical industry, They see the benefits of having Sar- recast, moving from tough economic because of aging technologies and nia leverage these strengths and times to a future filled with opportu- aggressive worldwide competition: Bridging The Gap build the bio-based and hybrid chem- nity. As the eastern Canadian hub for “What we needed was to redefine ical industry. refined petroleum and petrochemical Sarnia-Lambton, drawing on its in- In conjunction with the work of SLEP, products, Sarnia-Lambton has a herent benefits. We lived through dif- the BIC/SCA — whose efforts have Author: promising future thanks to the ongo- ficult times, but we learned from it helped bridge the gap between bio- Murray McLaughlin, executive director, Bioindustrial Inno- ing work of the local community and and are looking forward. There is no chemistry and synthetic chemistry — vation Centre some key organizations that have going back.” has been a significant change agent. been driving a vision to transform the What Mallay and other SLEP part- With headquarters at the Sarnia- Contact: region into a leading center for chem- ners recognize is the rich opportunity Lambton Campus of the Western Uni- Murray McLaughlin istry, clean energy, bio-industry, and in Sarnia-Lambton with its significant versity Research Park, its proximity Bioindustrial Innovation Centre more importantly, growth. In addi- infrastructure — pipelines; feedstock; means Bioindustrial Innovation Can- Sarnia, Ontario, Canada tion, the area boasts one of the storage caverns; power, gas and ada is uniquely positioned for collab- Tel.: +1 519 383 8303 ext.237 world’s strongest clusters of educa- steam supplies; transportation and oration. It is touted as the leading www.BICSarnia.ca tion for the chemical industry. distribution arteries, including rail bioindustrial accelerator with a [email protected]

Wave of New Investments in US Manufacturing

The American Chemistry Council ment will be a game-changer for eco- plans to expand U.S. chemistry pro- decades, particularly for the business (ACC) appreciates the stream of new nomic growth in West Virginia, not duction or explore new investments in of chemistry. ACC, however, concedes investments in chemical manufactur- only for chemical companies, but for major manufacturing facilities. As of that energy policies must protect the ing that have been announced re- the region’s manufacturing sector as November 2013, 135 chemical pro- environment while enabling access to cently. According to the association, a whole”, added Dooley. jects worth nearly US-$90 billion in natural gas. these announcements are further ev- Odebrecht is one of a growing list proposed capital in- Growth in domestic natural gas idence that abundant and affordable of companies that have announced vestment have been production reduces prices and cre- supplies of natural gas have made announced, with 54% ates a more stable supply. It is esti- the United States the most attrac- coming from compa- mated that U.S. shale deposits contain tive place in the world to invest in nies based overseas. 100 years of natural gas supply. This chemical manufacturing,” said Access to vast shale gas is a “game changer” that is ACC President Cal Dooley after new supplies of rejuvenating America’s chemistry in- Odebrecht, parent company of American natural dustry – and can strengthen U.S. man- Braskem America, reported its gas from shale de- ufacturing, boost exports, and create intention to build a multi-bil- © niroworld - Fotolia.com posits is one of the hundreds of thousands of new jobs. lion dollar ethylene cracker in most exciting do- the Mid-Ohio Valley of West Vir- mestic energy ginia. “Odebrecht’s significant invest- developments in www.americanchemistry.com

26 • Regions & Locations Guide 2013 www.chemanager.com SAXONY-ANHALT /// CENTRAL GERMANY CHEMISTRY GROWS HERE A24 IN OUR PARKS. BERLIN

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In Saxony-Anhalt, as a part of the Central German Chemical Triangle, five expertly developed chemical industry parks will safeguard the successful growth of the chemical and plastics industry. The network of the Central German chemical sites, the Central European Chemical Net- work (CeChemNet), combines the sites in Bitterfeld, Leuna, Schkopau, Böhlen, Zeitz and Schwarzheide which cover a total area of about 5,500 hectares. There are 600 companies operating with 30,000 professionals to ensure that our chemical landscape continues to flourish.

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