Looking forward to Fecc Congress

a part of the industry and – importantly – sticking with it.

“We need to have young talent coming in and I think that’s something that will be widely discussed as well. I believe it’s important how we bring young talent and diversification into the industry,” says Prior. “I think the chemical industry generally has a perception of being a ‘dirty, old’ industry and that it’s lots of men in grey suits. It’s a perception we need to try and change – certainly in terms of the ‘dirty, old’ industry, that has changed completely.”

Prior mentions how when he first started in the industry the main considerations for new employees tended to be two things: doing something they enjoyed and money. “Money is much less of a driver than it used to be for this new generation. But what drives them? I think a lot of younger workers want to be a part of something where they can make a difference. As a company, we believe that companies should be good corporate citizens of the world. To do this, they need to be giving back in some way. Social responsibility is taking a huge role and becoming a central part of business aims.”

As an example, Prior explains how his company supports a charity in Malawi that provides schooling for 600 children, a health centre and kitchens. The operations are manned by staff of the business to ensure a genuine connection. There are fundraising events throughout the year highlighting fun and team sessions, particularly summer parties or sporting events. Staff have the opportunity to go out to Malawi on a paid sabbatical to be a part of something beneficial. “We have found that this charitable addition has also been successful in assisting the company to retain talent,” says Prior.

“Of course, businesses need to give fair wages, decent benefits, be a good employer, show progression in a career, train and mentor individuals and more,” continues Prior. “But, I think, if a company can be a little more unique in giving back to communities (locally and internationally), and involve staff, it can be quite powerful.”

CONSIDERING REGULATIONS When it comes to new regulations and updates, Prior explains that the industry as a whole is prepared as regulations and changes often come along together. However, there is concern surrounding the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) Regulation and Brexit.

“I think it’s concerning, not just for UK companies, but also those in the EU as they have the same issues when transferring goods,” says Prior. “Our view is that UK REACH is very unprepared. In its current form we don’t think it will work too well in terms of having to get information and testing data into the system.” One concern is that the UK government appears to believe that because information has been input in Europe, the data will be available and exist for the UK. Data ownership means that it is not such a straightforward affair.

Preparing for Brexit either side of the Channel, Prior notes that stockpiling is the main solution. “One of the big issues will be surrounding supply chains and there are distributors that have been ordering emergency stock. We have put in quite a few million pounds worth of additional strategic stock into the UK to prepare.

“We have also been assisting customers to work out what levels of stock should be brought in and held. A lot of customers seem to have been complacent regarding Brexit; it is probably only in the past month or two that people have started truly thinking about it. The main thing in the short term is securing supply chains and stock, but after that the focus will shift to things like UK REACH, how to cope with VAT, what will tariffs look like, etc. There’s a lot of businesses still saying ‘oh, it won’t affect me’, while others are saying ‘I don’t know what to do to prepare’ – it’s difficult.”

NEW REGULATIONS AND CHANGING TRADE PATTERNS

An overlooked issue is that, despite the UK government hiring new customs and tax officials at HMRC, these new employees are often inexperienced, which will reduce their effectiveness and efficiency. The general industry consensus seems to be that there will be short-term disruptions, but whatever happens, a solution and a sense of normality will be sought as swiftly as possible.

CHANGING TRADE Compared to the chemical industry itself, the distribution sector has experienced good growth recently. In terms of the market, Prior describes the 2018 period as “reasonable” but flat. However, certain areas have been showing specific growth. Cornelius has seen nearly 40 per cent growth in year-on-year comparisons from some interesting causes.

“We conducted research and found that stockpiling is making a difference, but only about 10 to 15 per cent of the 40 per cent difference. The remainder appears to be due to customers continuously developing and working on new products,” explains Prior. “It’s not that the markets have gone completely with Brexit, people are still doing things. I was quite encouraged with that observation.”

When thinking about the upcoming quarters and conversations that businesses associated with Fecc have been having, Prior says that the first quarter of 2019 was “actually quite buoyant for many”; the second quarter is emerging as a bit flatter, and the second half of the year depends a lot on what happens with Brexit. “Globally, I think we might start to see some improvements. The US probably won’t go into recession and I think world trade will start to improve.”

The US chemical industry is set to continue expanding. The Asian markets are also growing and, even though the Chinese market has not grown as fast as previously, it has done better than most thought it would. “These market growths are all positives, but what should be of particular note for the chemical industry is China,” says Prior. “China has growing emphasis on the environment and is very aware of the dangers of the industry, as seen with recent incidents. What we’re finding is that good Chinese manufacturers are investing heavily in environmental control and installing stateof-the-art wastewater facilities, emissions scrubbing and more. Despite this, periods of heavy pollution in Chinese cities occur and, when they do, the Chinese government tells industry to shut down. This of course causes huge disruptions in manufacturing.”

Forecasting where business appears to be heading, “I still think the growth engine of the world is south-east Asia, particularly for speciality chemicals,” says Prior (above). Prior is also keen to point out that India is rapidly becoming a growth area with lots of recent investment in infrastructure and that this will be a topic of discussion for Fecc at this year’s Congress. NEW FORMAT Fecc is eager to unveil a new format for the event. Previously a speaker would give a presentation then answer any questions the audience may have. This time, there are two panel sessions with an expert moderator from outside the industry – Katrina Sichel – to bring audiences and panels together. The scope of this year’s event is far more interactive and there is a drive for more participation from the audience. An official app (Fecc2019APP) will be used to allow audiences to get further involved with the discussions and question periods.

Two sessions will be held, one in the morning and the second in the afternoon, where four or five panellists, typically seniors in industry, will be questioned. The aim is to seek their expert views on questions such as retaining talent, digitisation and diversification, including a specific showcase on women in leadership.

There is also a plan for two younger members of the industry to join the panels, debating different points of views and encouraging new talent to consider the opportunities in the industry. For a full agenda and registration options, go to the dedicated event website, www.fecc-congress.com. HCB