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March 09, 2021 01:42 PM

Executives eye complicated post-COVID business world

Frank Esposito
Senior Staff Reporter
Plastics News Staff
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    Shell Chemicals
    Shell is installing a 42 silos to a new petrochemical facility in Monaca, Pa.

    Executives from several major plastics and petrochemical firms looked back on 2020 and addressed future challenges March 9 during the online World Petrochemical Conference hosted by IHS Markit.

    "COVID highlighted how essential our products are," said Mark Lashier, president and CEO of Chevron Phillips Chemical Co., a polyethylene maker in The Woodlands, Texas. "We had record sales but also had to contend with changing demand patterns."

    In the near future, said Lashier, who's retiring from the firm on April 1, the world's growing middle class will drive demand for petrochemicals. That growth then will drive the industry's operating rates, margins and overall investment.

    He added that circular solutions for petrochemicals continue to grow.

    "Plastics are sustainable, but they need circular solutions," Lashier said. "This is a monumental step forward for the industry to make."

    Bob Patel, CEO of LyondellBasell Industries, a PE and polypropylene producer and compounder in Houston, said that the market continues to deal with the impact of COVID.

    "A light switch isn't going to turn off COVID," he added. "Vaccinations will help, but it's something that's still going to be here for some time."

    The effect of Winter Strom Uri in February also continues to impact the Gulf Coast.

    "It's not just cold weather, it was the sudden loss of power, steam and natural gas," Patel said. "You don't anticipate that."

    He added that LyondellBasell supports the work of the Alliance to End Plastic Waste, as well as continuing to work on its own efforts in mechanical and chemical recycling of plastics. Patel estimated that construction of a world-scale molecular recycling unit — using a chemical process that doesn't require sorting of different plastics and that can produce FDA-approved virgin resins — is 5-6 years in the future.

    Collection of plastic waste "is a very important topic around the world, whether you're in Indonesia or Rotterdam or Houston," Patel said. "Many sites don't have enough waste to process."

    Shell Chemicals of Houston also is working to reduce plastic waste and carbon dioxide emissions, according to Executive Vice President Thomas Casparie. The firm has set a goal of using more than 2 billion pounds of plastic waste as feedstock. It also wants to be net zero on carbon dioxide by 2050.

    "We're close to our customers and we're listening to them," said Casparie, whose firm is opening a major polyethylene site near Pittsburgh next year. "We need to change our mindset from selling products to providing sustainable solutions."

    ExxonMobil Chemical of Houston has been focused on resilience, agility and innovation during the pandemic, President Karen McKee said.

    "A year ago, everything changed," she said. "Demand for some products faltered, but people also needed our products for masks and other supplies to keep people safe."

    ExxonMobil, a maker of PE, PP and specialty resins, "was able to pivot to societal needs" for materials like PP resin used in masks and isopropyl alcohol for hand sanitizer.

    "Resiliency isn't just about being able to survive, but also how to thrive," McKee said.

    In the logistics world, 2020 "was an inflection point" for the petrochemicals industry, according to Eelco Hoekstra, CEO and chairman of tank storage leader Royal Vopak in The Randstad, Netherlands.

    "There was unprecedented volume in oil, chemicals and natural gas globally, but suppliers still found ways to manage their businesses," he said. "Now, they'll organize for greater collaboration in the chemicals supply chain."

    During 2020, Royal Vopak bought marine and terminal operations from Dow Inc. at three Gulf Coast sites in a deal worth more than $600 million. The firm now has a goal of reducing the environmental footprint of its customers' supply chains, Hoekstra said.

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