Interview: Partner in success
Mohammad Husain speaks, about the company’s strategic acquisitions of MEGlobal, the role of sustainability and innovation in the current business environment and what he believes the future holds for petrochemical producers
Established in 1995 and currently the world’s second largest producer of ethylene glycol (EG), EQUATE has grown into a world-renowned brand with strong presence in international markets, diverse portfolio and manufacturing facilities capable of producing tonnes of highly differentiated products for domestic consumption and export. Its 1,000 strong workforce comprises more than 20 nationalities, making it a top employer of choice in Kuwait and globally.
Human capital development forms a central part of the company’s sustainability focus, leading it to invest in various talent training initiatives designed to realise the full potential of its existing employees and empower the new generation of highly reliable young professionals aspiring to pursue a career in energy. Having a highly diverse workforce of different talents and background is one of EQUATE’s biggest strengths, says CEO Mohammad Husain.
“We have long realised that development, progress and advancement are essential to maintaining our world-class role as a petrochemical enterprise. That simply means tapping into the innovative potential of our human capital who represent our main partners in success,” Husain begins.
“People are the cornerstone for all forms of success at any organisation, regardless of its size. Nurturing and developing the competencies of these individuals will ensure realising objectives, and continuous and future achievements,” he added.
Research and innovation (R&I) is another key aspect of the firm’s continuous commitment to sustainability. In today’s rapidly changing energy environment only the most innovative, creative and technologically advanced producers would have the capability to ride out the challenges and turn them into opportunities instead. A passionate advocate of technology as an enabler to future business success, Husain believes innovation and sustainability should be at the forefront of operators’ future strategies if they are to stay ahead of their competitors, while also catering to their customers’ requirements.
“Since commencing operations 20 years ago, we executed the steps to become a global integrated petrochemical organisation, not merely a producer or an exporter. We continue to actively support our customers with a variety of high quality products and services with unparalleled supply reliability and innovative technical solutions,” Husain explained.
Through its focus on innovation and sustainability, EQUATE earned the GPCA Plastics Excellence Award 2015 in the Excellence in Plastic Products & Processes category for its development of the attributes of a grade of Linear Low Density PE (LLDPE).
Such an improvement of this grade enhanced the clarity and reduced the blocking properties of plastics manufactured using this grade. The applications of this modified grade, developed by EQUATE in cooperation with a number of plastic manufacturers, include bags for vegetables, fruits and bakery, a major benefit of this application being reducing the manufacturing cost.
The company also entered a partnership with the Kuwait Foundation for the Advancement of Sciences (KFAS), Americana – Meat Cluster, a regional food enterprise, and Plastic Industries Company, a Kuwaiti plastics manufacturer, to devise an optimal solution in plastic food packaging. The solution was developed based on plastic raw material production and film conversion resulting in enhanced plastic properties.
EQUATE also recently signed a Memorandum of Understanding (MoU) with Sabah Al-Ahmad Centre for Giftedness & Creativity (SACGC) covering innovation initiatives, intellectual property, patenting, technology transfer, R&D, building capabilities and other partnerships for overall sustainability.
“Economic diversification is a key element for Kuwait and other GCC countries. Currently, petrochemicals represent the second largest source of income after oil. For that, we continue supplying petrochemical products, developing innovative solutions, evaluating new products, as well as providing relevant economic and technical applications,” Husain said.
EQUATE’s focus on sustainability and growth has contributed immensely to the development of Kuwait’s downstream sector. Between 1998 and 2015, annual production of ‘Made in Kuwait’ plastics jumped by a mammoth 450% as a result of the company’s rapid downstream expansion. More recently, it completed a highly complex polyethylene (PE) debottlenecking project, which is set to increase its PE capacity from 825,000 metric tons annually (MTA) to almost 1mn MTA. Following its acquisition of MEGlobal, EQUATE’s EG production capacity reached 2.4mn MTA, making it the world’s second largest EG producer with a 12% market share.
“These steps are part of our strategic expansion plans as an international petrochemical enterprise. We benefit, especially in the US, from overall integration in terms of low cost advantaged shale gas, strategic location, feedstock availability and operational excellence,” Husain said.
Against the backdrop of rapid urbanisation in most parts of China and plans to build sophisticated infrastructure and more accessible sanitation for people in developing economies, demand for petrochemical products is projected to increase significantly in a number of key regions.
Analysts expect annual demand for ethylene to grow at over 10% in the coming decade, while Asia alone is expected to add as many as 650mn new petrochemical customers over the next 20 years, according to research firm IHS Markit.
“The import of plastics in Asia will continue to form a significant portion of the region’s growing consumption.
Throughout the past 20 years, we have noticed the resilience and drive of the industry to support the growth of essential end-use market segments. Our expansion will enable us to meet rising demand for petrochemicals throughout the world, especially in the US and Asia,” Husain said.
With the implementation of its ‘2020 Strategy’ in full force, EQUATE is planning significant capacity expansion in key geographic locations. Over the last 10 years, it has been able to expand or establish presence in different parts of the world including Kuwait, Europe, Canada and the US, while retaining its focus on PE and EG as two of its core markets.
The company also recently invested in a $1bn facility located next to the Dow Oyster Creek site in Freeport, Texas. The plant, expected to come in stream in late 2019, will add some 750,000 MTA of EG raising EQUATE’s total production capacity to 3.15mn MTA.
Husain expects demand for PE and EG to be around 4.5% and 4% respectively, despite the current economic slowdown, which has largely been one the drivers behind the company’s latest investments, he explains.
“The overall global presence of EQUATE and the positive demand growth patterns of PE and EG, among other factors, have led us to create opportunities by finalising our PE debottlenecking project and establishing the EG plant in the US.”
The cloud of uncertainty over supply and demand, pricing and the effect of crude oil prices on some liquid products, is likely to remain at least in the foreseeable future, Husain explained.
Still, the level of competitiveness of some of the world’s key players would prove decisive in the battle for more market share.
“The accumulated maturity of the industry is now the catalyst that is shaping the future of this sector through innovation and the development of new markets. We expect the market to remain volatile with a noticeable amount of anticipation by petrochemical producers and consumers in light of the current low inventories.
Demand will be acceptable, but oil prices will impact the prices of petrochemical products, especially liquid products, such as EG and styrene. Furthermore, OPEC’s decision on whether to curtail production will have a direct impact on the energy world as a whole, including petrochemicals,” Husain concluded.