Samir Hifri has faced some challenges in his first six months leading Covestro LLC, but he's looking forward to meeting goals in sustainability and other areas.
Hifri became chairman and president of Covestro LLC on July 1, replacing Haakan Jonsson, who retired. Pittsburgh-based Covestro is the U.S. operating unit of materials maker Covestro AG of Leverkusen, Germany.
"We've got a great team here and a great organization with a lot of activity going on," Hifri said in a Dec. 14 video interview. He joined Covestro — then part of Bayer AG — in 1998 as a commercial trainee in Pittsburgh. He later held positions in product management, sales and marketing, supply chain and country management.
Hifri has worked at 10 Covestro sites across six countries and three continents.
Prior to his current role, Hifri served a dual role as senior vice president and managing director of Covestro Hong Kong, as well as head of the supply chain and logistics center for the Asia-Pacific region.
Current challenges facing Covestro and the global plastics and chemicals market vary from region to region.
"The U.S. is becoming a hub of innovation in future technology," Hifri said. "But we're seeing the deindustrialization of Europe, which is sad to see, because that region was the mother of the chemical industry."
Among end markets, Hifri said that automotive and mobility have been "surprisingly resilient" in 2023 with activity in lightweighting and in electric vehicles. But the construction and furniture markets "have been dragging down" results because of higher interest rates. "We hope [construction and furniture] improve in 2024," Hifri added.
"It's still a very challenging [overall] environment," he said. "There are some good signs, but overall the chemical industry is in a recession."
Like many plastics and chemicals firms, Covestro is focused on increasing its levels of sustainability. The firm has set a goal of achieving climate neutrality at its operations by 2035.
"If we don't lead the way to more sustainability, we'll be left behind," Hifri said. "We all need to lower our carbon footprint, and we're exploring all avenues to become fully circular."
With that goal in mind, Covestro signed its first major renewable energy deal in June for its U.S. operations. The agreement between Covestro and Danish clean energy leader Orsted A/S will supply 90 megawatts of power to Covestro's production site in Baytown, Texas.
The 15-year agreement secures power from the Mockingbird Solar Center in Lamar County, Texas. The deal is expected to offset more than 150 million pounds of carbon dioxide emissions annually and will reduce scope 2 emissions from Baytown, which is Covestro's third largest global production site.
In research and development, 80 percent of Covestro's current projects are focused on sustainability.
"It's a question of how to shift from fossil fuels while maintaining performance and cost competitiveness," Hifri said. "We have 18,000 employees around the world, and every one of them has a target that affects that goal."
Global supply chains that have been negatively impacted by several factors in recent years have worked out a lot of their challenges, Hifri said, but still aren't back to pre-pandemic levels. "There were a lot of sleepless nights," he added.
Higher inventories were a short-term solution to supply chain challenges, but Hifri said that a long-term solution will require supply chains being as close to operations as they can be. "We're well-positioned, but there's more to be done," he added.
Looking to 2024, Hifri said that he "doesn't expect a lot of change" in the first six months of the year, but is cautiously optimistic about the second half. He added that the U.S. should continue to benefit from having costs that are competitive when compared to other regions of the world.
Covestro's U.S. presence includes roughly 2,700 employees and 13 site locations. The U.S. business represents approximately 25 percent of global Covestro sales.
Covestro is a global supplier of polycarbonate resins and films, thermoplastic PU, PU materials and foams, and other specialty chemicals and materials. The firm posted sales of $19.6 billion in its 2022 fiscal year.