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A
U
TU
M
N
2007
SHELL CHEMICALS
Shell Chemicals
Global scenarios
A long-term view of thefuture business environment
In safe handsLogistics contractor campaigndrives safety improvements
Paint by numbersVersatility of solvents helps resolvformulation challengesG ges
Global scenarios
A long-term view of thefuture business environment
In safe handsLogistics contractor campaigndrives safety improvements
Paint by numbersVersatility of solvents helpsresolve formulation challenges
Expert assetmanagementDecade of investmentcreates world-classpolyols complex
Expert assetmanagementDecade of investment
creates world-classpolyols complex
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Service status
Sven Royall. Vice President Customer
Services and Intermediates, provides
updates on a major chemicals project
in Singapore, investment aimed at
unlocking the value of alternative
cracker feedstocks, and progress
on the implementation of REACH.
22Global engagement
Shell is taking a European engagement
programme designed to raise awareness
of the potential hazards
associated with handling
isocyanates to its polyols
customers in global
developing markets.
The move is part of an
overall commitment to
raising standards of
product stewardship
across the world.
URETHANE C HEMIC ALS
Sustainable strategies
A strategic relationship with a
major styrenics customer in one of
the key developing markets in India
has been built on both business
compatibility
and a shared
vision of
sustainable
development.
16
STYRENE MO NO MER
24
LOGIST ICS
FRONT COVER
The PO & Derivatives
complex at Pernis-
Moerdijk-in The
Netherlands has
undergone a decade
of investment.
hell Chemicals Magazine is produced forhe customers and contacts of Shell chemicalsompanies. It is published twice per year, coveringevelopments in the worldwide Shell chemicalsusinesses, and the chemicals industry in general.
ditorm Clarkel: +44 1322 280012-mail: [email protected]
Managing editorMichele Barrett, Head of Communicationshell Chemicals Limitedel: +44 20 7934 4175-mail: [email protected]
DesignNaked Vine
hotographyolin Whyman
einier GerritsenAshesh Shahrnst Bodeo Kun Hee
opyrighthe views expressed in articles identifying the author are those of theuthor and are not necessarily shared by the Shell Group of companiesthe editor. The copyright in an article identifying the author belongs to
e author and permission to reproduce such an article must be obtainedom that author. Permission to reproduce unidentified material should bebtained from Shell Chemicals Limited; this will normally be grantedrovided the source is acknowledged.
Shell Chemicals Limited 2007
isclaimerhe information contained in this publication is, to the best of ournowledge, true and accurate, but any recommendations or suggestionsat may be made are without guarantee, since the conditions of usere beyond our control. Furthermore, nothing contained herein shall beonstrued as a recommendation to use any product in conflict withxisting patents covering any material or its use.
hell Chemicalsach of the companies which make up the Shell Group of companieshe Shell Group or the Group) is an independent entity and has itswn separate identity. In this publication you will find the terms Shell,hell Chemicals, we, our and us. They should be read in their
ontext. They may refer to the Group as a whole; they may refer to onemore companies within the Group; or they may refer to the people
ho work for a particular Shell company or companies in a particulareographic area or in a particular area of business in which Shellompanies engage. The terms Shell Chemicals and Shell chemicalsompanies collectively refer to the companies of the Group that aredividually engaged in the chemicals business.
SN 1747-0706
inted in England by Evolve Complete Print Solutions.
nquiriesAll enquiries about this magazine should beddressed to the local Shell chemicals companyr to Shell Chemicals Limited, Shell Centre,ondon, SE1 7NA, UK.el: +44 (0) 207 934 4286ax: +44 (0) 207 934 7703
hell.com/chemicals
4
SHELL CHEMICALS
STRATEGY
12Back to the future
Nobody can predict the future,
but Shell develops Global
Scenarios - a range of
alternative futures - to act as
a guide and challenge to its
business decision-making.
Asset management
A decade of investment aimed at
maximising capacity, optimising
efficiency and strengthening the
competitiveness of polyols production
at Pernis-Moerdijk in The Netherlands
has created a world-class complex.
6
P O LYO LS
In this issue
10
Driving home the safety message
Initiatives aimed at contracted hauliers and
their drivers are helping to build a stronger
safety culture among logistics service
providers, in order to eliminate unnecessary
incidents during deliveries and unloading.
A Formula for flexibility
How the flexibility of solvents
can help the paint and coatings
industry address some of its
key formulation challenges.
20
SO LVENTSDrill skills
Emergency response exercises, using
simulated real-life scenarios, conducted
in conjunction with
ethylene oxide
customers are
proving key to
sharing knowledge
and experience for
responding effectively
to potential incidents.
SHELL CHEMICALS 3
ETHYLENE O X ID E
C USTO MER SERV IC ES
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Roger Dauer, Lower Olefins Unit Manager, Alex Farina, Base Chemicals Strategy manager,
and Philippe Voyer, Lower Olefins Asset coordinator with a sample of hydrowax.
We are committed to ensuring REACH is workable and
a success - it will have long-term influence on our industry
and so we must get the initial implementation right
Sven Royall, Shell Chemicals Vice President,
Customer Services & Intermediates.
54
C U S T O M E R S E R V I C E S
Service status
t has been just over a year since theShell Eastern Petrochemicals Complex
(SEPC) projects groundbreaking, when
Singapore Prime Minister Lee Hsien
Loong and Rob Routs, Shells Executive
Director Downstream, signalled the start
of building work.
Since then activity levels on Singapores
Jurong Island and Bukom Island have
grown significantly. The majority of
construction contracts have been awarded
and the number of mobilised resources
is increasing daily.
When complete, the SEPC complex will
include a new 800 kt world-scale ethylene
cracker and a 750 kt mono-ethylene glycol
(MEG) plant. The project scope also
includes a 155 kt butadiene extraction
facility and modifications and additions
to the Shell refinery on Bukom (pictured).
PROJECT MANAGEMENT
This project, which is targeted for start-up in2009/2010, is not only a major part of our
growth strategy in Asia, it is also another
important opportunity to demonstrate Shells
ability to design, manage and deliver
a major capital project.
The project team faces a number of
challenges, not least because this project
is being built during a busy period of
economic development in Singapore.
Securing resources and equipment, and
arranging appropriate logistics to move
them in a relatively confined environment,
are significant hurdles.
Special measures undertaken include
the reclamation of land for the cracker,
Sven Royall, Vice President Customer Services and
Intermediates, provides an update on Shells major
chemicals project in Singapore and others designed to
maximise the sustainability of manufacturing operations,
progress on REACH implementation in Europe, and the
continuing focus on safety and product stewardship.
building of temporary dormitories to housearound 4,500 construction workers, and
re-commissioning of a ferry terminal to
move workers to the islands efficiently.
At the peak of construction the project will
require the services of up to 8,000 people.
Despite this, the project has progressed
well so far this year, and with an excellent
safety record. Piling work has reached full
capacity and some of the main structures
will start to be assembled before the end
of the year. Discussions with key potential
customers are also progressing.
Those involved are focusing a lot of
energy into maintaining momentum to
ensure that both the construction schedule
and safety record are maintained.
More information can be found on the
project website: shell.com/chemicals/sepc
TAKING FULL ADVANTAGE
The SEPC complex is based on our model
for world-scale manufacturing complexesthat leverage the integration that Shell, as
a major energy group, can achieve at sites
with both refinery and chemical operations.
SEPC will not only provide capacity to
support our glycols customers growth plans,
it completes the value chain between Shells
oil and chemicals interests in Singapore.
At Pernis-Moerdijk in The Netherlands
we are also investing in this oil-chemicals
advantage, including recently announced
plans to unlock the value of hydrowax as
cracker feedstock (see box right).
Europe, despite its conservative growth
rates, remains a heartland for our business
but to survive in this mature market you
have to be competitive. As well as seeking
out opportunities to secure advantaged
feedstock we have undertaken projects
designed to strengthen the efficiency
and sustainability of Pernis-Moerdijk.
The most recent will see the application
of the latest process technology for
production of polyols, which will unlock
additional capacity and make better useof our plant infrastructure. This is the latest
stage in a decade of investment in our
PO-Derivatives business at the site, which
has created a centre of excellence for
urethane chemicals. You can read about
this transformation on page 6.
PROGRESS ON REACH
Another major challenge facing all
producers in Europe is the implementation
of the REACH chemicals legislation.
Although the legislation only came into
force earlier this year, we have been
preparing for this for a number of years
and as a result we believe we have
made significant progress.
An inventory of products we currently
expect to register can now be found on
our website (shell.com/chemicals/reach),but we still have a lot of work to do to
finalise the details of how those products
will be registered. There are also many
loose ends and issues relating to the
complexity of the legislation and its impact
on the competitiveness of the European
industry and individual companies.
Shell has contributed significant
resources to, and played an active role
in, the sector groups and industry bodies
that are addressing these issues. As chair
of CEFICs Product Stewardship Council,
I have also been personally involved in
some of these discussions.
We are committed to ensuring REACH is
both workable and a success. It is going
to have a long-term influence on our
industry and its important that we get
the initial implementation right.
We support the underlying goals of
REACH because they are consistent with
our commitment to promote the responsibleproduction, use and handling of the
products we make.
That commitment goes beyond
compliance with regulations, however.
In this issue you can read about some
of our voluntary product stewardship
programmes including: the emergency
response drills we conduct in conjunction
with ethylene oxide customers (page 10);
efforts to drive safety performance
improvements with contracted logistics
providers (page 24); and how we are
taking industry best practices for handling
isocyanates to polyols customers in key
developing markets (page 22).
A significant investment is being
made at the Pernis-Moerdijk
complex in The Netherlands to
enable the sites cracker to utilise
refinery hydrowax as feedstock.
It is part of a strategy to strengthen
the oil-chemical integration at the
site and so maximise its long-term
competitiveness.
The project involves using hydrowax
produced at the Pernis refinery, andpotentially other refineries in Europe,
to replace naphtha that currently has
to be imported into Moerdijk.
Hydrowax is a by-product of the
refinerys hydrocracker but can offer
significant advantages compared to
conventional ethylene feedstocks,
explains Alex Farina, Strategy
Manager for Base Chemicals.
Its high hydrogen content produces
a similar yield to naphtha but at
lower cost. Redirecting the hydrowax
from Pernis is an example of how
we can leverage the close integration
with oil refining activities.
The investment will focus on some
alterations to the cracker furnaces
and developing the logistics to
transfer the feedstock.
We have used hydrowax before
as a feedstock but never on this
scale or in such a systematic
fashion, explains Philippe Voyer,
Lower Olefins Asset Coordinator.
Hydrowax is a little like candle
wax and solidifies if allowed tocool, which means it has to be
heated to maintain its liquid form,
he explains. Part of the project
will involve using heated storage
tanks and shuttle barges to move
the feedstock the short distance
from Pernis to Moerdijk.
The project is expected to be
completed during the first quarter
of 2009. Graham vant Hoff, Vice
President Base Chemicals Europe,
said: This investment is key to
ensuring Pernis-Moerdijk remains
one of the most competitive
petrochemical complexes in Europe.
I
INVESTING IN ADVANTAGED FEEDSTOCKS
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P O L Y O L S
ork recently began on
a project at the Pernis
polyols complex that will
see the application of thelatest continuous process technology for
manufacturing advanced grades for
flexible foams.
It is the latest stage in the development
of the complex, which has undergone
a decade of continuous investment and
improvement with a focus on advanced
process technology, manufacturing
integration and sustainability.
The new continuous process technology
will boost output of flexible polyols by 100
kt per year, taking Shells total worldwide
polyols production to over 400 kt per year.
This project is the culmination of a
significant capital investment programme
focused on reinforcing the position of
Pernis as a world-class facility, says
Sonia Michiels, Global Business Manager
Propylene Oxide and Derivatives (PO-D).
It builds on the advantages of feedstock
integration, leading technology and strong
supply chain and logistics operations thathave been developed at Pernis, along
with a team of people that has extensive
knowledge and experience in the
production of urethane chemicals.
OPTIMISED ASSETS
The development of the polyols production
facilities at Pernis has reflected the growth
in key global markets. Capacity increases
have been achieved by a combination
of optimising existing assets and adding
new plant infrastructure.
We have rationalised some assets while
growing overall capacities by adding
new units and applying advanced process
W
technology in debottlenecking projects,
in order to respond to demand from
customers in a sustainable way,
says Michiels. This has maximisedour competitiveness and enhanced
the efficiency of our business in what
is a tough, competitive market.
She says the expansion of Pernis has
been a key driver behind Shells rise
from one of the top ten polyols producers
in the world, to one of the top three.
STRATEGIC IMPORTANCE
The strategic importance of the site is
a direct result of investments in propylene
oxide (PO) capacity Shell has made at its
adjacent Moerdijk petrochemicals facility.
Moerdijk has two world-scale SM/PO
plants - one wholly-owned by Shell and
the other a manufacturing joint venture -
with total PO capacity of over 450 kt, a
large portion of which is sent to derivative
plants at Pernis.
Access to secure supplies of PO, and
careful management of the interaction
between feedstock and derivative plants iscritical for sustainable, competitive polyol
production, says Jean-Claude Vandichel,
Special Projects Integrator for PO-D.
We have been able to leverage a high
level of integration at Pernis due to the
easy access to both Ethylene Oxide (EO)
and PO from the world-scale plants at
Moerdijk, as well as upward integration
with the sites cracker and refinery.
Large-scale polyols production was
developed at Pernis back in the 1970s
and 1980s with the construction of three
flexible polyol lines during that period.
The current investment programme began
in 1999 and included the startup of
More than 10 years of investment and development has turned the polyether polyols
complex at Pernis in The Netherlands into a centre of excellence for the production of
urethane chemicals. It has resulted in one of the most advanced, integrated facilities
in the world, equipped to respond to market growth and customers changing needs.
Operational teams at Pernis have extensive knowledge and expertise in the
production of propylene oxide derivatives.
A decade of investment and improvement at Pernis has significantly improved
its capacity, efficiency and competitiveness.
Sonia Michiels, Global
Business Manager
Propylene Oxide
and Derivatives.
By focusing our resources in Pernis we have created a
world-class manufacturing complex, and are also delivering
on our strategy to provide customers with the products they
need in the most sustainable and efficient way
Asset management
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8 9
Were moving from a batch to a
continuous production process in order to
deliver the additional capacity we need,
and to produce base polyol grades in
a more efficient and sustainable way,
explains Vandichel.
This project has the added advantage
that it enables us to bring additional
capacity onstream within a relatively short
time frame. The new capacity is expected
to be in place by the second half of 2008.As a result, overall output of flexible
polyols at the site will increase from
155 kilo tonnes to 255 kt per year.
This will help to solve some of the
capacity constraints in Europe while also
strengthening our global supply position,
says Vandichel. Demand for polyols
globally is growing by 4-5% per year.
The sustainability of manufacturing
operations has been at the heart of
all polyols investments at Pernis.
Our philosophy of making optimal use
of existing equipment, instrumentation
and infrastructure, and applying advanced
process technology, has delivered a range
He says there has been significant
investment to support the transfer of
production. Parts of the polyols complex
at Pernis have been upgraded and
debottlenecked to enable the production
of essential CASE grades.
UNLEASHING POTENTIAL
The latest phase in the development of
the complex will help to unleash further
potential from its assets and infrastructure,
and reinforce its long-term sustainability.
The application of continuous process
technology for producing flexible polyols
is a direct response to growth in key
markets. Increased demand is the result
of both organic growth in the slabstock
foam industry in Western Europe and
increasing influence from companies inEastern Europe, Middle East, and Africa.
Western Europe is moving towards
more differentiated base polyol grades for
premium foams, while Eastern Europe and
other developing markets are taking an
increasingly larger share of the commodity
polyols market, says John van Kesteren,
Flexible Polyols Product Manager.
Making additional capacity available
is part of a commitment to supporting
existing customers growth plans, and to
strengthen those long-term relationships.
The expansion will be based on making
optimal use of existing assets, by using the
latest process technology.
For more information about theCARADOL range of polyols visit:
shell.com/chemicals/caradol
a new rigid polyols plant - doubling rigid
polyol capacity and incorporating the
most modern manufacturing processes.
This plant introduced a totally new
concept in rigid polyols production,
explains Vandichel.
Its design delivered more control over
processes and increased the capability for
producing tailor-made base polyol grades
for rigid foams used in applications like
insulation, appliances and construction.
A further significant expansion came in
2003 with the startup of a new polymer
polyols plant, one of the largest of its kind
in Europe, which marked an important
development in this high growth sector
of the urethane chemicals market.
Polymer polyols are standard flexible
polyols modified using polymer suspensiontechnology, to produce harder, more
durable and more comfortable foams.
The Pernis plants range of CARADOL*
styrene acrylonitrile (SAN) polymer polyols
are produced using Shell technology.
PREMIUM GRADES
Recent years have seen a shift in focus to
production of polymer polyol grades due
to the significant increase in demand for
higher performance foams for premium
furniture, bedding and automotive
applications.
Foam producers have increasingly used
polymer polyol grades because they can
produce foam properties that cannot be
achieved using standard flexible polyols
alone, explains Vandichel. They deliver
improved levels of comfort at lower
formulation cost, and now account for a
significant portion all polyols sold globally,
making them an essential part of ourgrade range.
Other investments at Pernis have been
aimed at improving product quality and
responding to specific application
requirements.
The installation of a special unit to remove
VOCs (volatile organic compounds), which
are formed as by-products during the
production of flexible polyols, has helped
to raise the quality of foam products. The
presence of VOCs in polyols can create
an odour in finished foam which although
harmless is perceived as undesirable
in some consumer applications.
Special technology employed on
the SAN polymer polyols plant also
ensures that these high performancegrades are compatible with the latest
liquid carbon dioxide (CO2) foaming
equipment increasingly used by customers.
Last year the integration of polyols
production was further enhanced by the
decision to transfer production of CASE
(Coatings, Adhesives, Sealant and
Elastomers) polyol grades from
Carrington in the UK to Pernis.
This move allowed us to consolidate our
European polyols production at Pernis and
to maximise asset utilisation. It has brought
production of all grades of polyols rigid,
flexible, polymer and CASE into one
single integrated location, says Vandichel.
P O L Y O L S
of benefits from improvement in energy
and water consumption, to reduced
carbon dioxide emissions and waste
generation, says Sonia Michiels.
The expertise of specialist polyols
operations and production personnel
at the site has also led to improvements
in product quality and consistency, as
well as an impressive safety record.
By focusing our resources in Pernis
we have not only created a world-classmanufacturing complex, we are also
delivering on our strategy to provide
customers with the products they need in
the most sustainable and efficient way.
*CARADOL is a registered Shell trademark.
The expansion of Pernis has been one of the key
drivers behind Shells rise to one of the top three
polyol producers in the world
Assistant Plant Manager Nelke Van de
Ven in one of the sites control rooms -
advanced process control is one of the
keys to unlocking the sites potential. Jean-Claude Vandichel, Special Projects Integrator - leveraging the benefits of integration.
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10 11
E T H Y L E N E O X I D E
said Reinhold Brand,
President of Goldschmidt.
This exercise provided us with
an opportunity to both evaluate
the skills of our staff, and to see how
local emergency services would respond.
The drill at Hopewell involved a
simulated emergency resulting from an
EO spill from a railcar. This is one of a
number of realistic scenarios we are able
to recreate, and we tailor the exercise to
fit the customers facilities and training
objectives, says Amelia Hung, Shells
Global Product Steward for EO.
Were preparing for something we hope
never happens but we want our customers
and their local emergency response crews
to understand the potential hazards and
the proper way to respond if there is
a leak or spill, she says.Examining response procedures under
a simulated real-life scenario can be one
mergency response exercises have
become part of an established EO
product stewardship programme
developed by Shell in the US.
While the auditing of customer premises
for general HSSE (health, safety, security
and environment) standards is a mandatory
condition of business terms, emergency
response drills are voluntary and can be
organised at the request of customers.
We regularly conduct emergency drills
at our own facilities and have built up a
lot of knowledge and expertise in dealing
with potential incidents, explains Renee
Lampkin, Americas EO Product Manager.
Drill skillsHigh standards of product stewardship by both supplier and user are essential
for a product such as ethylene oxide (EO). A joint exercise with Degussa,
designed to test emergency response procedures, is an example of the
ongoing commitment to sharing and exchanging knowledge and
experience on safe product handling with customers.
EBy sharing that experience through
joint exercises with our customers we hope
to help raise overall standards of product
stewardship across our industry.
To our knowledge were the only EO
producer that offers this as a service and
have found that our customers welcome the
opportunity to learn from such exercises.
She says serious incidents involving EO
are thankfully rare despite the volume of
product moved across the US. This means
there is limited real-life experience, and so
exercises involving simulated incidents are
vital for effectively testing and practicing
the skills for dealing with them.
The drill at the Hopewell, Virginia, plant
of Goldschmidt Chemical Corporation and
Degussa Corporation, both subsidiaries of
Evonik Industries, was arranged after an
employee attended a previous Shell training
class as a guest. Degussa recognised the
value of this type of exercise for the sites
own emergency response training. We
have a longstanding relationship with
Degussa and it shares the high priority
we put on safety, says Lampkin.
Degussa uses EO as an intermediate in
a range of chemical products. Making
sure we are fully prepared to respond to
a chemical emergency is important to us,
of the most effective ways to do this.
As part of the exercise, the sites first
responders had to deal with the immediate
aftermath of the spill, establish an incident
command post and notify local emergency
services. As the scenario played out the
responders had to retrieve and treat the
injured, dilute the spill with water and
manage the containment of the incident.
This gave us opportunities to practice
techniques and teamwork so that in the
event of a real incident, each organisation
is able to perform and work together,
said Russell Mait, Goldschmidts Director
Environmental, Health, Safety and Quality.
All participants took the exercise
seriously. Each step of the unfolding
scenario, including the use of
decontamination showers, was carried
out as though it was real, says Hung.During the drill, Shell observers -
including experienced emergency response
team members from Shell sites - evaluated
the performance of the Hopewell plants
personnel and local emergency crews in
dealing with the incident.
TWO-WAY LEARNING
Hung says there are always valuable
learnings to be gained from the exercises.
We conduct one or two of these drills
every year and each one highlights
something new. Its a two-way learning
process theres always something for
both us and the customer to take away.
Its not just about the sites response to
an incident, its also about how they work
and communicate with local emergency
services who may have the primary
responsibility for dealing with it.
Following the drill the Shell observers
provided a full critique of the response.Its not a test and theres no pass or
fail score, says Hung. Its more about
discussing the response, highlighting
any potential gaps and encouraging
suggestions for improvement.
Lampkin says these exercises, in addition
to mandatory safety reviews and other
HSSE initiatives, are key to the continual
evolution of EO product stewardship.
These exercises take a lot of effort and
organisation but our experience suggests
they are invaluable for raising awareness
and understanding of safety issues related
to handling EO, and for continually raising
standards of product stewardship.
The participation of emergency services not only adds realism to the exercise, but is
also essential to test how effectively the site coordinates with local fire and hazmat crews.
First responders move in to retrieve the injured during the simulated emergency scenario, while water is sprayed to dilute the spill.
For more information on ethyleneoxide please visit:
shell.com/chemicals/eo
Examining procedures
in a simulated real-life
scenario is one of the
most effective ways to
test understanding of the
proper way to respond in
the event of an incident
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our decisions. To do that we have to
understand better the various conditions
under which we may have to operate in
different regions or circumstances.
Shells Global Scenarios explore the
global business environment, while Shell
Energy Scenarios drill down into the
dynamics of the energy system.
Building and using scenarios helps us
explore what the future might look like and
the likely changes to living in it. It makes
us more open to change and more likelyto survive and thrive than an organisation
that is continually chasing events.
As well as being a valued business tool
for Shell, the Global Scenarios have an
excellent reputation around the world for
broadening and stimulating discussions
across the global business community.
LATERAL THINKING
In developing scenarios Shell draws on
a diverse combination of lateral thinking
and hard data from accredited sources.
In addition to experts from Shell, input is
gathered from a wide range of individuals
and organisations from business,
S T R A T E G Y
academia and research, at both local
and global levels. Notable economicsources include the World Bank and
International Monetary Fund.
Patterns or trends that have emerged
from the past may also offer pointers
to the future, but there are also critical
uncertainties faced by societies that may
be resolved in several possible ways.
Because there is no single answer to such
issues, the scenario builders create sets
of scenarios, each one describing a
different way in which the uncertain
aspects could play out.
RELEVANT CHALLENGE
We dont like to discount anything
upfront, but nor do we invent potential
future events, explains Thomas. Good
scenarios are ones that explore the
possible, not just the most probable from
todays perspective. They should provide
a relevant challenge to conventional
wisdom and help to prepare us formajor changes ahead.
In the 1990s, the Shell Global Scenarios
explored a world dominated by the forces
of globalisation, new technology and
market liberalisation. Those developed at
the start of this century set out two worlds:
one driven by efficiency, economic
integration and a different role for nation
states; the other by the enduring power
of cultural values and social cohesion.
GLOBAL SCENARIOS TO 2025
The most recently published Shell scenarios
- Global Scenarios to 2025 continue
these themes but put them into
the context of recent geo-political,
economic, and social aspirations and
forces that are shaping our future.
Specifically, they take into account two
crises that have unfolded since 2001 -
namely 9/11 and the Enron collapse -
that have fundamentally affected peoples
trust in security and the marketplace.
Insecurity and mistrust that have arisen
in the light of these events have led to
new barriers to the free movement
of people, but not goods and capital, as
well as a stronger role for the state both
in protecting national security and in
restoring trust in the market.
1312
Wim Thomas from the Shell Global Business
Environment team responsible for developing
the Shell Global Scenarios.
Back to the
Nobody can predict the future but energy companiesneed to take a long-term view of trends or events
that might impact markets and economies. The Shell
Group develops Global Scenarios, which offer a
plausible range of alternative futures, to challenge
and inform business decision-making. Read on for
a view of what the future might hold
hell has been developing and
using scenarios for 30 years
to gain deeper insights into its
global business environment, to
identify emerging challenges and
to foster adaptability to change.
The scenarios are not forecasts or
predictions, but rather credible alternative
views of what the future might look like,
which can be used to review and assess
business strategy.
Scenarios help us explore the manycomplex business environments in which
we work and factors that drive changes
and developments in those environments,
explains Wim Thomas from Shells Global
Business Environment team.
They help to bring clarity and simplicity
to often highly complex issues and prepare
us for potential discontinuities and sudden
change in the global business environment,
such as political upheaval or new and
emerging technologies.
We face real challenges in the future
and we need to be able to respond
to changing environments and make
informed and rigorous assessments of
S
FUTURETwo crises have unfolded since 2001-
9/11 and the Enron collapse - which have
fundamentally affected peoples trust in
security and the marketplace
Events such as 9/11 and the Enron
collapse have had a fundamental impact
on global business environments.
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A legalistic world where the
emphasis is on security and
efficiency, at the expense of social
cohesion. Globalisation continues at
a slower pace due to increased state
regulation and legislation. Goods
and capital flow but with lower
levels of market innovation because
movement of people is restricted:
This is a prove it to me world,a sceptical world. The key words are
compliance, compliance, compliance.
Its about playing by the rules.
A world of lawyers and accountants
with a culture of blame: when things
go wrong, regulation and litigation are
seen as answers. Action is reactive
rather than proactive.
Heavy compliance requirements bring
high transactions costs in markets and
foster greater business scale: markets
are dominated by large, vertically
integrated companies that are able to
control potential liabilities in the supply
chain. Value protection is as important
as value creation. Compliance and its
cost and scale implications also create
large barriers to market entry by
small and medium-sized companies.
The absence of trust leads to rapid
regulatory change, overlapping
jurisdictions, conflicting laws andintrusive checks and controls.
A dogmatic world where security
and community values are
emphasised rather than economic
efficiency. National values dominate
at the expense of economic growth,
with people retreating behind
national gated communities,
resulting in decreased transparency
in markets and societies:
Flags is a follow me world, wherepeople are dogmatic about their codes
and causes.
Although still interconnected with the
rest of the world, people feel a stronger
need to express their own identity in
terms of the group/club/nation/religion
to which they belong.
A pragmatic world that emphasises
social cohesion and efficiency, with
the market providing built-in
solutions to the crises of security
and trust. Trust is restored and
there is high economic growth:
Open Doors is a know me world, a
world of trust: in global systems, and in
globalisation. It is a pragmatic, proactive
and co-operative world.
In this world, government acts in the
background, maintaining trust and
security through incentives and soft power
rather than intrusive checks and controls.
States are inclusive, taking responsibility
for the wider constituencies in society.
Reputation can be a substitute for
intrusive controls. Reputation carries a
premium, but also makes companies
vulnerable. Voluntary best-practice codes,
and close links between investors and civilsociety encourage cross-border integration
and virtual value chains. Networking skills
and reputation management are essential.
Competitive advantage through
innovation is short-lived, but not to
innovate is not an option. Companies are
driven to innovate in order to compete.
More capital is available to invest in
innovation because financial markets have
a higher appetite for risk. There is faster
dissemination of innovations because of
the open global business environment.
Global equity markets become more
integrated and large sums of venture
capital chase superior returns.
LOW TRUSTGLOBALISATION FLAGS OPEN DOORS
Different scenarios,different worlds
More recently, the rapid export-led
growth of developing countries
and their impact on global demand
for energy and other commodities has
helped to fuel a new wave of resource
nationalism, as well as a rise in
protectionist pressures in Western
Europe and North America.
NAVIGATING COMPLEXITY
These changes make the interactions
between market participants, states and
society more complex. The Global
Scenarios to 2025 provide a way of
navigating through that complexity byoutlining three sets of forces - market
incentives, the force of community, and
coercion and regulation - and how these
drive towards the societal objectives of
efficiency, social cohesion and security.
These objectives are, at times, in tension
with each other and the scenarios explore
the resulting trade-offs that are needed to
reconcile them, setting out what is called
the Trilemma (see Fig 1).
The Trilemma provides a map of
relations and interactions among market
participants, civil society and states.
In particular, it examines the interplay
of three complementary, but occasionally
S T R A T E G Y
competing societal objectives.
Three Global Scenarios or possible
futures Low Trust Globalisation, Flags
and Open Doors - offer a way to
capture the interactions between the three
sets of forces and the subsequent trade-offs
and choices that may shape the business
environment over the long term (see right).
These scenarios are broad pictures of
the world. Some countries may oscillate
between the scenarios, or particular
scenarios may be more prevalent in some
parts of the world than others. This means
it could become more difficult for
companies to adopt global standards,or they may require different business
14
The sometimes complex interplay between the three sets of Global Scenarios and the societal forces
and objectives of efficiency, social justice and security.
structures in different parts of the world.
And although these scenarios look to the
future, they can also be used to put todays
events into context in order to better
monitor and interpret them. Such analysis
could point to the possible future direction
of the global business environment and
whether one or more of theses scenarios,
or indeed combinations of scenarios, are
beginning to emerge.
In this way the scenarios themselves can
be reviewed, and if necessary, challenged
as we move towards 2025, says Thomas.
From the signposts we get from current
events, there are clear indications that thethree fundamental objectives and driving
forces of the Trilemma are shaping todays
world. The eventual balance among these
forces, examined in the three Global
Scenarios, will determine the direction
in which the world goes.
Good scenarios are
ones that explore the
possible, not just the
probable. They should
provide a relevant
challenge to conventional
wisdom and help toprepare us for major
changes ahead
15
Flags is fragmented and polarised
both internationally and domestically.
People distrust others with whomthey cannot closely identify.
Opposing groups try to capture the
state for their own objectives - by votes,
violence or money. Or governments
wave the national flag, encouraging
unity by reminding them we all belong
to the same country. Careful country-
risk management is a priority.
Security is pursued through isolation
and gated communities. Global mobility
of people and money, hence trade,
is seriously hampered.
Businesses with strong national
identities fare well and are granted
state protection.
SHELL CHEMICALSSHELL CHEMICALS
For more supporting information onthe Shell scenarios please visit:
www.shell.com/scenarios
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S T Y R E N E M O N O M E R
to gaining the trust and confidence of the
community. From the outset we realised
that if we did not have the support of local
people if they did not see improvements
in their lives - we would not be able
to grow our operations here.Ern-Teng Phua, Shell Chemicals SM
Sales Manager for Southeast Asia/India,
says SPLs commitment to SD is on a scale
that is not yet common in emerging markets.
It has clearly recognised the business
value of SD, not just for improving
a companys image but as a critical
enabler of growth, he says.
SPLs presence has been the catalyst
for the creation of a range of small
businesses, from plastic processors,
contractors and suppliers, to haulage
companies and even travel agents.
The company has also actively sought to
involve the community in the running of its
upreme Petrochem Ltd (SPL) is
Indias leading styrenics producer,
with more than 50 percent of the
domestic market, as well as a
strong international presence through
exports to over 85 countries. Moreover,
the companys emphasis on operating
under the principles of SD, has earned it
both a valued reputation amongst the local
community, and recognition at a regional
and national level.
Over the last decade SPL has grown
to become one of Shells largest SM
customers in the Asia-Pacific/Middle
East region, accounting for over
100,000 tonnes per year, which is
shipped to India from Singapore.
SHARED VISION
The relationship has developed as a result
of both strategic fit and a shared vision of
corporate citizenship. SPL has become a
significant player in styrenics in the region
and its scale and development strategy is
well aligned with our growth objectives in
key developing markets, says Wee
Chiong Lim, Shell Chemicals SM Business
Manager for Asia-Pacific/Middle East.
Its also important for us when
developing strategic relationships in
emerging markets that the customer has
a sustainable business model. SPL has
demonstrated that it shares our thinking
and philosophy about doing business in
Sustainable strategiesIdentifying customers that share Shells commitment
to the principles of sustainable development (SD) is
one of the challenges of expanding into developing
markets. In India, however, the styrene monomer
(SM) business has forged a strong relationship with
a major styrenics producer that has put SD at the
top of its corporate agenda.
Sa sustainable manner, and being
committed to high standards of HSSE
(health, safety, security and environment).
SPLs styrenics manufacturing facility,
located at a 340-acre complex 120 km
from Mumbai, produces a range of
crystal, high impact and specialty
polystyrene grades.
In addition, a compounding facility
enables it to process a wide range of
styrene-based products as well as other
types of polymers.
In ten years the plants capacity has
grown from 60,000 to over 272,000
tonnes of polystyrene per year. Improving
the lives of people in the local
community has been key to that growth.
Since starting operations there in1995 SPL has not only brought direct
and indirect employment to the area but
also established and funded a number
of community development programmes
and environmental initiatives.
Its presence and support has spawned
a range of entrepreneurial businesses,
co-operatives and mini-industries that
have transformed the local economy.
N. Gopal, SPLs Executive Director
(Styrenics) says: When we came to
Amdoshi we set out to become a partner
with the community and to demonstrate
that it would benefit from our presence.
He says SD initiatives have been key
1716
Executive Director - Styrenics, N. Gopal (left), gives Wee Chiong Lim, SM Business Manager for APME (second
right), and Ern-Teng Phua, SM Sales Manager for Southeast Asia/India (third left) a tour of SPLs facility.
business. We sponsored local students to
attend technical university, who then come
back to work for us. They have not only
become key members of our team but also
act as ambassadors to the local villages,
explains Gopal.A large portion of the land acquired
for the SPL site was allocated to the
development of a commercial plantation,
providing a green belt between the plant
and the local villages. The plantation
is used to grow crops, trees and medicinal
plants, and provides an opportunity for
local people to acquire horticultural skills
and develop small spin-off businesses.
We provided the agricultural training
and management support to enable local
people to develop a small agricultural
industry, says Gopal. The plantation
workers now also offer their experience
and services to other organisations.
We set out to become a
partner with the local community
and to demonstrate it would
benefit from our presence here
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ore than 50 percent of global
solvents production is
consumed by the paint and
coatings industry. It is one
of the most innovative chemicals industry
sectors, reacting quickly to changing
market dynamics and adopting new
technologies to deliver improved coatings
performance or properties.
The increasing pressure of regulatory
trends, competition and the need for
innovation, however, is having an impact
on product development and the types
of solvent being used.
The selection of solvents is becoming
a critical factor for formulators as theysearch to develop products that comply
with legislation, reduce formulation costs
and improve coating performance,
explains Ekkehard Kuestermann,
Solvents Technical Manager for Europe.
A number of new paint technologies are
emerging in response to this - including
waterborne, high solids, radiation curable
and powder coatings but they all pose
formulation challenges, he says.
In nearly all cases paint producers still
rely heavily on a solvent as a key part of
the formulation. Selecting the right type
and grade of solvent for each application
is becoming a significant factor.
A formulafor flexibilityThe paint and coatings industry is the largest sector of the solvents market and alsoone of the most dynamic responding to regulatory trends, competitive pressures
and technical innovations. The breadth and flexibility of the industrial solvents
portfolio, however, continues to offer solutions to many formulation challenges.
M
S O L V E N T S
1918
S T Y R E N E M O N O M E R
For more information on styrene visit:
shell.com/chemicals/styrene
CONSERVATION PROJECTS
Through the work of the plantations
nursery, SPL has also donated more
than 10,000 saplings to forestry and
conservation projects across the region.
Other projects have helped to develop
facilities in the villages themselves,
including the provision of a clean water
supply, constructing school buildings and
contributing resources for the local library.
The company continues to provide training
and scholarships for local students,
sponsorship for cultural and sports
activities and funding for health check-ups
and awareness schemes for villagers.
Expansions of the plant, meanwhile,
have been achieved without increases inpollution, through improved energy and
water conservation measures. Many
of our units are demonstrating industry
global best practices for pollution
control, waste management and
energy optimisation, says Gopal.
SPL is a signatory to the Responsible
Care2 initiative in India and its
environmental and quality credentials
include ISO 9001, ISO 14001, OHSAS
18001, as well as a Five Star rating for
Health & Safety Management from the
British Safety Council.
Gopal says that the companys approach
to SD has been a good investment. As a
result of these programmes we have the
full support of the community, as well as
local authorities, and are considered
to be an honest, ethical company.
Alliances with leading international
companies have been key to developing
products capable of meeting the
requirements of global markets. SPLs
products conform to US and EU food
contact requirements and meet
international standards for electrical
and electronic appliances.
The developing relationship with Shell
Chemicals is also fundamental to its
growth strategy, which aims to take
advantage of opportunities in emerging
specialty styrenics applications.
GROWTH OPPORTUNITIES
While growth in traditional, low-end
styrenics sectors, such as CD and music
cassette cases, has levelled off in India,
there are significant opportunities in
more sophisticated end-uses and exports.
With GDP of around 9 percent, India
is one of the fastest growing economies
in the world. This is fuelling demand from
key sectors such as automotive, electronics
and consumer goods industries for more
advanced polymer systems.
In response, SPL has been looking to
diversify its portfolio of styrene-based
products, with a focus on speciality PS
grades and tailor-made compounds. A
45,000 tonnes per year EPS (expandable
polystyrene) plant is under construction
and due to be completed by mid 2009.
It also recently acquired an EPS facility
in Chennai, which will be operational by
the end of Q1 2008 with an enhanced
capacity of 20,000 tonnes per year.
The company has plans to move into
ABS (acrylonitrile butadiene styrene).
These moves are part of our thrust
towards catering to the specialised
requirements of developing industry
sectors in India, and for expanding
our market horizons, says Gopal.
To support these ambitions Shell and
SPL are looking at options to further
integrate their strategic relationship thatwill secure long-term supplies of SM.
Its a relationship we want to develop,
not just because we see the opportunity
to support SPLs growth plans, but also
because the two companies understand
each other and share a philosophy, says
Wee Chiong Lim. Thats important when
youre in business for the long term.
SPL representatives visit the styrene plant in Singapore which supplies their facility near Mumbai, India.
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S O L V E N T S
For more information on the ShellChemicals range of solvents visit:
shell.com/chemicals/solvents
formulations because they produce a
coating thickness that could require at
least two applications of other paints.
Typically high solids coatings have a
lower overall solvent content, which has
an impact on their viscosity, pot life and
curing temperatures, says Wiersma. To
allow the use of lower volumes of solvent,
formulators have to use a solvent with
higher solvency power, such as ketones
and aromatic solvents, to achieve the same
viscosity and performance properties.
Other formulations have been impacted
by health and environmental concerns
of certain solvent products. For example,
stricter product classification and
occupational exposure limits have
restricted the use of low boiling point
white spirits and aromatic solvents.
This has led to greater use of de-aromatised aliphatic mineral spirits and
glycol ethers in industrial and protective
paint formulations, where occupational
exposure is an issue, says Wiersma.
SHIFTING PRODUCTION
In recent years Shells solvents business
has responded to changes in the market
by shifting the emphasis of production to
more non-aromatic solvents, and increased
production of chemical solvent grades.
Cutting edge innovation, such as the
emergence of nanotechnology is likely
to have an increasing influence on solvent
selection in the paint and coatings sector.
Shell chemicals companies produce and
market one of the largest and broadest
portfolios of oxygenated chemical
solvents, hydrocarbon solvents, glycols
and glycol ethers.Having a broad
product range is essential in helping
customers to alter formulations, or
develop new ones, in response to
market demands, says Kuestermann.
The breadth of solvent grades available
and their wide variety of properties
provides a lot of flexibility for formulators.
There are many opportunities to move
from one solvent to another in order
to meet new performance criteria.
To further assist customers, Solvents
Technology experts from Shell Global
Solutions have developed a computer-
aided tool to make reformulation easierand more systematic.
The BlendPro 5.0 software (see box)
can be used to develop solvent systems
according to performance criteria or
to meet environmental limits relating
to Hazardous Air Pollutants (HAPs) and
Volatile Organic Compounds (VOCs).
Emissions of VOCs and other health
and environmental concerns have led to
a range of legislation in Europe and the
US that has impacted the types of solvents
used in certain paint applications.
In Europe, the Solvents Emissions
Directive (SED) and Decorative Paints
Directive have imposed strict limits for
VOC emissions that may be created either
as part of the paint manufacturing process
and/or when the paint product is used.
ALTERNATIVE FORMULATIONS
In some cases this has led to use of
alternatives to VOC-emitting solventsystems and different types of paint
formulations. The SED does, however,
allow industrial users of conventional
solvent-based coating systems to reduce
emissions by abatement techniques.
Water-borne paints, developed in
response to VOC regulations, are
expected to take an increasing share
of the market in some regions. In Europe
and North America they are almost
exclusively used in DIY decorative
paints, where VOC emissions cannot
be controlled during application.
Even water-borne paints actually contain
up to 15% of mostly water-soluble solvents,
including chemical solvents and glycol
ethers, in order to maintain a coatings
durability and appearance. The increasing
use of water-borne technology was one of
the major factors behind Shells decision
to invest in a world-scale glycol ethers
plant at Pernis in The Netherlands.
Adding a range of propylene-based
glycol ethers to our portfolio has enabled
us to respond to the growing requirements
for these solvents from customers that are
developing products based on water-borne
technology, says Kuestermann.
In Asia-Pacific, the use of solvent-borne
decorative paints continues to grow,
although other technologies are expected
to transfer to the region in the longer term.
In industrial paint applications, such as
the automotive industry, where VOCs canbe captured during paint application,
Nanotechnology can help to improve
traditional coating performance criteria
but can also enable the development
of smarter formulations and special
properties, says Wiersma.
CAREFUL SELECTION
These innovations will continue to
require careful formulation and selection
of appropriate solvents in order to
deliver products that can be produced
economically, applied easily and
perform to the same standard.
Despite the pressure of regulation,
costs and innovation, overall solvents
consumption in the global paint and
coatings industry is still growing strongly.
Demand growth is moderate but stable
in Western Europe and North America
but is rising steadily in Eastern Europeand in Asia-Pacific, which now accounts
for over 30% of global paint production.
The growth in the market reflects the
fact that the performance of solvents is
still hard to effectively replicate in many
paint applications, explains Kuestermann.
Faced with having to respond to different
market drivers, formulators will continue
to rely on the flexibility of solvents.
there are different approaches to solvent
selection. While some car manufacturers
have moved towards water-borne coatings,
others continue to exploit the overall
performance benefits of solvent-borne
coatings, particularly in more efficient
paint application techniques.
Car makers are looking to reduce costs
by moving to thinner, fewer, layers of
paint with reduced curing or drying times
in between, explains Rene Wiersma, a
Solvents Application Researcher with Shell
Global Solutions. This reduces the energy
and time required in the painting process
and conventional solvents, due to their
high solvency and evaporation rates,
are very effective in this process.
In other sectors, such as coatings for
metal protection on bridges and pipelines,there has been a trend to high solids
20 21
Solvents Application Researchers Illse Dullens and
Rene Wiersma use BlendPro to provide technical
support for paint and coatings formulations.
The breadth
of solvent grades
available and
their wide variety
of properties
provides a lot
of flexibility for
formulators
TAKING THE GUESSWORKOUT OF REFORMULATION
Shells BlendPro 5.0 solvent software
tool helps customers to optimise
solvent systems and blends, and
makes the process of reformulation
quick and efficient.
It automatically calculates solvent
blend properties (flash point,
evaporation, solvency power, resin
solubility; exposure etc.), allowing
systematic evaluations of
formulations in a desktop study
rather than through expensive,
time-consuming laboratory trials.
The software, which operates in
a conventional PC Windows
environment, incorporates
performance and HSSE data on
each solvent type and grade,
enabling paint producers to
generate new or alternative
formulations to specific criteria.
It includes models for specific
applications such as sprayed and
indoor brushed products, and can
be applied to both solvent- and
water-borne systems.
The flexibility of solvents is key
to the development of paints and
coatings able to meet performanceand environmental criteria.
For more information visit:
shell.com/chemicals/solvents/blendpro
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22 23
U R E T H A N E C H E M I C A L S
it has implemented to manage TDI emissions.
Shells commitment to sharing its
knowledge and experience with us has
been key to making this happen, he says.
Koury believes it is the role of industry
leaders to set high standards. Legislation is
not our motivation but it will come one day
and so measures put in place now will help
prepare us for a more regulated market. Ifwe lead, the industry will start to follow.
RAISING STANDARDS
Nevertheless, the challenge of raising
standards across developing markets is still
significant. The lack of a comprehensive
regulatory structure combined with rapid
economic development in some regions
has meant attention to HSSE issues has
sometimes been low key.
Shell standards are often still way
ahead of local regulations where they
exist. Bad practices also tend to be more
extreme, including personal protective
equipment (PPE) not being worn in foaming
areas leaving workers directly exposed
to TDI emissions and inappropriate use
of empty contaminated TDI drums.
Many problems arise because of low
awareness of the hazards of working with
TDI amongst smaller companies, explains
Aditi Sawhney, Sales Manager for Indiaand the Philippines. But customers aspire
to global HSSE standards even if they are
he Walk the Talkprogramme,
based on guidelines developed bythe European polyurethanes
industry body ISOPA, has already
proved effective at raising awareness of
the hazardous nature of isocyanates
among Shell polyols customers in Europe.
Although not produced by Shell,
isocyanates such as TDI are used to react
with polyols in slabstock foam production.
Direct exposure to TDI emissions may
cause irritation to the eyes, skin and
respiratory system. Prolonged over-
exposure can have more serious medical
consequences. Handling TDI in line with
recommended practices, however, should
not pose a hazard to health or environment.
Through the Walk the Talkinitiative
ISOPA members have taken information
and guidelines for the safe handling of
isocyanates to hundreds of users across
27 European countries, explains Mike
Jeffs, ISOPA Secretary General. We
believe the benefits of this engagementwill come through, with fewer incidents
and higher safety standards.
He says ISOPA welcomes the fact that
its member companies are now taking
the initiative to a wider user base. This
information is relevant beyond the borders
of Europe and Shell is at the forefront of
expanding the scope of engagement.
Having established a high level of
understanding with customers in Europe,
attention has turned to developing markets.
Were using the experience and
learnings from the initial rollout to take
the programme to a global audience,
says Elder Teixeira, Urethane Chemicals
Global engagement
T
Sales Manager for Latin America.
Customers in Latin America are not
receiving this information from other
sources and so appreciate the fact Shell issharing this knowledge with them, in order
that they can fully understand the risks and
make sure their people are protected.
CBP of Brazil is one of Shells major
polyols customers in Latin America and
a leading foam producer. As a result of
Shells awareness campaign it has been
proactive in implementing measures to
raise standards for handling TDI.
Guilherme Koury, the companys owner
and Marketing Director, says its motive is
simple: Although we employ more than
400 people we are still essentially a familybusiness. We want to look after our people
and provide a safe environment for them
to work in because they are part of the
family and part of our success.
CBP has used the ISOPA guidelines and
other support materials provided by Shell
to train and inform its workforce, and has
invited both customers and other producers
to its facilities to demonstrate the measures
not there yet, and have responded positively
to our approach because they are not
getting this support from other suppliers.
As part of Shells global campaign the
ISOPA checklists and guidelines have been
translated into a number of additional
languages. Customers are usually
surprised but pleased to receive this
information from us when we do noteven supply the TDI, says Sawhney.
This has been backed up by site visits
by Sales and Technical Support staff to
go through checklists, provide assessments
and present training videos. These visits are
targeted at reaching the people actually
handling the chemical, as well as engaging
with the customers management team.
The challenge is often to convince the
operational people of the need for
mitigation measures. In many countries
the absence of PPE is often simply a result
of the fact that workers are operating in
temperatures of over 40C, she explains.
Praduman Patel, Joint Managing Director
of Sheela Foam and Joyce of Australia - a
subsidiary of Sheela Foam, Indias largest
foam producer - has used personal
experience as motivation for implementing
high safety standards at the companys
facility in New Delhi.
When I started in this business 30 yearsago I was operating machinery and
handling foam myself, so I know the
hazards of TDI if the correct procedures
and safety equipment are not in place.
Sheela Foam has invested in modern
foaming machinery equipped with the
latest extraction technology, while
recognised processes are in place for safeunloading of TDI, dealing with minor spills
and for effective drum decontamination.
ALWAYS THINGS TO LEARN
He says Shells engagement programme
has helped to fine-tune its standards and
processes. There are always things to
learn and ways to improve and the Shell
campaign has helped to raise awareness
and bring these issues to the surface.
As an industry leader its important for
us to take the initiative in health and safety
issues, not just for our own reputation but
for taking the industry in India forward.
While there is still a long way to go,
the global TDI programme has already
resulted in noticeable changes in attitude,
and greater recognition of the commercial
value of a reputation for strong health and
safety performance in developing markets.
Foam producers are increasingly
engaged in health and safety initiatives
because they not only want to protect their
workers but also because they understand
the importance of image in gaining the
trust of their growing number of potential
consumers, says Teixeira.
They see no reason not to have the
same standards as their counterparts in
Europe and North America and we are
helping them towards that goal.
Personal protective equipment being used during the unloading of TDI from a tanker.
Elder Teixeira, Urethane
Chemicals Sales Manager for
Latin America - customers in
developing markets see no
reason not to have the same
standards as their counterparts
in Europe and North America.
CBP in Brazil has established high standards for mitigating TDI emissions at its manufacturing facilities.
For more information visit:
isopa.org/walkthetalk
Customers appreciate the fact that Shell is
sharing this knowledge with them so they can
make sure their people are properly protected
A European programme promoting the safe and responsible handling of isocyanates
used in polyurethane foam manufacturing processes has been rolled out to Shell
customers globally. Based on industry best practices, it is helping to raise
awareness and standards of product stewardship in key developing markets.
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Driving home the safety message
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L O G I S T I C S
tructural changes and competitive
pressures in the chemicals industry
mean that major producers have
to rely on outsourced logistics
providers to transport products by road
to their customers around the world.
The increasing reliance on contractors,
however, has raised challenges relating
to levels of safety performance during
delivery and unloading procedures.An increase in safety-related incidents
and near-misses during deliveries first
highlighted the issue in early 2005.
A rising number of incidents involving
contracted hauliers was leading to injuries
or spills, despite the fact that our internal
safety performance was making significant
progress, says Michael Crothers, Shell
Chemicals outgoing General Manager
Global Supply and Logistics.
Over the last two years
there has been a major
focus on improving the
safety performance of
contractors that transport
our products around the
world. Engagement and
awareness programmes,
incentive schemes and
compliance checks are
all part of initiatives to
build a stronger safety
culture among hauliers.
S
such as tanker rollovers (see next page).
He says HSSE considerations have
become an even stronger driver of the
haulier selection process. We are looking
to work with hauliers whose management
clearly appreciates the importance weplace on safety. Where companies have
demonstrated this through investment in
equipment and training, we try to
recognise this through higher volumes
or longer-term contracts with them.
Many hauliers are willing to adopt the
standards we are promoting, although
we understand that for some it represents
a significant challenge.
Its a complex change management
process which requires sustained energy
and commitment. Not all hauliers have the
capabilities to effectively drive this change
journey so we have stepped up our
resources and capabilities to help them.
The carrier industry is under a lot of
pressure at the moment but our hauliers
have responded well to our approaches.They respect what we can bring to their
business and can see the long-term benefit
of adopting these global standards.
However, we have also terminated
contracts with several hauliers because
of inadequate attention to HSSE issues,
Drivers of contracted hauliers have been targeted directly in the safety engagement campaign, with literature translated into several languages.
and rationalised our haulier base in order
to build better partnerships based on
strong HSSE cultures and capabilities.
While road and traffic conditions may
vary in different parts of the world, the root
cause of most safety-related incidents ornear-misses almost always comes down to
attitudes and behaviour. To address this
a hearts and minds campaign has been
targeted directly at drivers.
We want to reach out to our contracted
drivers because they are ultimately the
ones delivering the safety performance
while dealing with the typical pressures
to get the job done. Changing the way
they think and act will help to eliminate
unnecessary incidents, says Eggels.
Part of that is making them more aware
of the hazards but, just as importantly, its
about making it explicitly clear to them
that its OK to stop and report unsafe
Responsibility for our products does
not end when a truck leaves a Shell facility.
We need contracted hauliers to place
the same high priority on safety and
environmental protection as we do.
This issue is key to our reputation as
a responsible supplier, and is an integral
part of our business performance.
As a result, since the end of 2005 a
major effort has been underway to raiseawareness of, and improve compliance
with, Shell safety standards among these
contractors. We have set out clear
performance expectations, accountability
that includes rewards and consequences,
and improvements plans through
engagement with both their management
teams and drivers, says Crothers.
MAJOR LOGISTICAL TASK
Around 125,000 consignments over two
million tonnes of chemical products are
delivered to Shell customers globally each
year by road. Its a major logistical task,
entrusted to some 40 or so primary
haulage companies contracted to make
these essential deliveries across the world.
The engagement on safety issues with
these logistics service providers has been
stepped up significantly. We have put in
place a number of initiatives to help build
a stronger safety culture among ourcontractors, says Jack Eggels, Global
Land Logistics Manager.
It started with more focused and frequent
discussions on safety issues with the haulier
management teams, intensified compliance
spot checks as well as incentive schemes.
There has also been a lot more energy and
focus on safety issues during performance
reviews and contract negotiations.
This year we added direct engagement
with contracted drivers, while specific
campaigns have focused on key issues
Jack Eggels, Global Land Logistics Manager -
looking to work with hauliers that appreciate
the importance Shell places on safety.
As part of the elimination of potential hazards
the taking of samples at customer premises by
contracted drivers is being phased out.
Drivers have to feel able to stop and refuse to continue
with a delivery until an unsafe situation is remedied
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L O G I S T I C S
situations. They have to feel able to refuse
to continue with a delivery until
an unsafe situation is remedied.
As part of the identification and
elimination of hazards there have been
revisions to procedures in some regions.
In Europe, for example, sampling from the
top of road tankers or tank containers at
customer premises by drivers is being
phased out by the end of 2007.
This new policy, which is in line with
CEFIC guidelines, is designed to ensure
all supply chain activities are carried out
by qualified personnel. Customer staff are
generally well trained in dealing with our
products and better equipped to take and
handle product samples using adequate
safety precautions, explains Eggels.
He says that while Shell has not seenany incidents as a result of drivers taking
samples, there have been cases across
the industry, mostly due to drivers having
to climb on top of tankers or having to
use inadequate sampling equipment.
PROACTIVE MEASURES
We are taking proactive measures to
avoid potential incidents. If a sample is
necessary, we recommend customers use
an alternative method. A similar policy
is in place in the US/Canada and work is
progressing to roll it out globally.
Drivers are being engaged at all possible
opportunities, including Shell loading
Truck rollovers are typical of the
incidents encountered across the
chemical logistics industry.
Its almost always human error
rather than mechanical failure
that leads to these events,
says Jack Eggels, Global Land
Logistics Manager for Shell
Chemicals.
Speed is often one of the main
causes. Not necessarily excessive
speed, but speed inappropriate
for the conditions. Hit a curb
when travelling too fast, swerve
or brake suddenly and the
resultant sloshing of the product
in the tank can be enough to
tip the truck over.
In the comfortable, air
conditioned, computer-laden
cabs found in many modern
trucks drivers can sometimes
forget about the sheer bulk of
the materials they are carrying
and just how susceptible their
trucks are to tipping over, if
not driven with great care.
As part of the logistics safety
campaign, an engagement pack
has been produced to explain
to drivers why these rollovers
happen and to detail avoidance
actions for different situations.
locations, during on-the-road compliance
spot checks as well as via workshop
sessions at their own company premises.
Posters and leaflets are being distributed
across the globe in different languages to
make sure the key messages get through.
Eggels, who chairs CEFICs logistics
sector group, says learnings from Shells
campaign are being fed back into
appropriate industry bodies. We need
to take an industry approach to this issue
if we are to see a cultural change. We
hope that our programme will serve as
a good platform for wider initiatives.
ENCOURAGING RESPONSE
He has been encouraged by the response
to the campaign so far. Positive feedback
indicates that the campaign is sendingthe right signals and generating further
discussions. Hauliers have complimented
us for taking a leading role and have
encouraged us to continue the journey.
Nigel Hobson, incoming General
Manager of Supply and Logistics, adds:
Weve seen signs of improvement over
the last two years and the message is
clearly getting through. Its an encouraging
trend that confirms we are on the right
track. However, the challenge is to
maintain that energy and focus to ensure
improvements are sustained and that
safety becomes as integral to our
hauliers business as it is to ours.
Capturing the hearts and minds
of drivers is key to the elimination
of unnecessary safety incidents.
For more information visit:
shell.com/chemicals/safety
27
ADVICE FOR AVOIDINGTRUCK ROLLOVERS
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