Dirk Verstraeten takes the lead

PLAN YOUR JOURNEY

COVESTRO’S DIRK VERSTRATEN, CHAIR OF EPCA’S SUPPLY CHAIN PROGRAM COMMITTEE, EXPLAINS WHAT HIS TARGETS ARE FOR THE DURATION OF HIS TENURE IN THAT ROLE

Dirk Verstraeten, director of global logistics procurement at Covestro Deutschland, became chair of the European Petrochemical Association’s (EPCA) Supply Chain Program Committee (SCPC) in November 2018. He took over from Bertschi’s sales director Johan Devos, who had been in the role for an unprecedented five years, in a transition that normally sees the chair alternating between representatives of the chemical industry and their logistics service providers (LSPs).

“Although people come and go, the SCPC team has the crème de le crème in supply chain and logistics specialists both from manufacturing and service providers side,” Verstraeten says. “We were also very pleased to see that the EPCA team has been enlarged with the arrival of Gerardo Ambrosecchia as a project manager. The EPCA teams are getting stronger, which allows us to create more value.”

Less than a year into his planned three-year term in the role, Verstraeten tells HCB that he would like to identify a topic for the SCPC to look at during his tenure; over the coming year EPCA and the Committee could engage with that topic; in his final year, he hopes to be able to deliver a report and implement a project supported by EPCA.

FOLLOW THE LEAD So what is this big idea? As with all EPCA activities it is part of a journey, and one that was started by Johan Devos in 2017. Digitisation was one of those waves that starts with a buzzword and takes off; those waves, Verstraeten says, always start with the customer. In the case of digitisation, those customers had become used to the practice of home shopping, with its live tracking of parcels and seamless online payments.

In the chemical industry, such transparency has historically been missing. “You put your cargo on a ship and hope that it will get to the destination,” is how Verstraeten explains it.

But having picked up on that topic, EPCA went to work in its normal way, engaging with academia – in this case Vlerick Business School – and doing some research, before issuing a report (in 2018) and following up with a workshop in Brussels in June 2018 at Vlerick’s site in Brussels.

It is, Verstraeten says, vital to work with an external eye if EPCA is to generate value that its members do not necessarily have the time or the expertise to deliver. The Brussels workshop in particular led to lots of ideas and lots of talk. “It was a great event,” Verstraeten says. It also revealed that everyone is doing something in the realm of digitisation, addressing their own needs with the technologies available. Furthermore, it confirmed the earlier research that indicated that the petrochemical industry is behind the curve, and set some priorities for taking the process forward.

Verstraten says he likes the way the conversation is going on digitisation and hopes to follow this up during his chairmanship, to see if digitisation will turn into a full-blown enabler for business transformation.

THE SUSTAINABILITY WAVE This is where digitisation dovetails with the next wave: sustainability. “The next big challenge could »

very well be the circular economy,” Verstraeten says. “Just like digitisation, this new challenge seems to be coming from customers. One just needs to observe the next generation and their behaviour and expectations. For sure this will trigger again attention and projects within the chemical industry and this could very well change our supply chains.”

The younger generation wants a circular economy with less (ideally no) waste and, potentially, no plastics. “That doesn’t fit with traditional ways of doing business,” Verstraeten says. “It’s scary – but important.” And it is nowhere more important than in the petrochemical industry, supplier of those very plastics to which upcoming generations are so antipathetic.

The demands for sustainability present a big challenge to the chemical industry but the industry has to acknowledge the inevitability of the change, which is built into the mentality of younger generations, who merely want to use things and see no reason to own things any more.

The world is unlikely to do without plastics altogether and even environmental groups recognise that the characteristics of plastics – their malleability and longevity – make them extremely useful in certain long-term applications. What is needed is greater awareness of the need to collect, recycle and re-use plastics at the end of their initial life; the petrochemical industry has now established a $1.5bn fund to change behaviour and teach industry and the public how to handle and use plastics more responsibly. “It’s a joint effort,” Verstraeten notes.

WHERE RUBBER MEETS THE ROAD Verstraeten’s time as the chair of SCPC will, therefore, concentrate on the intersection of digitisation and supply chain sustainability. As with the focus on digitisation, this responds to the concerns of EPCA’s members in respect of structural and infrastructure issues in European transport: increasing road congestion, the challenges presented by the existing rail network, and low water on the Rhine.

Each of these factors impacts the effectiveness and efficiency of the European chemical supply chain and, certainly when it comes to low river levels, they may also be related to climate change. There is certainly a connection with the idea of sustainability and this is the question that Verstraeten would like to see answered: what potential is there for digitisation to make a difference for sustainability?

Some work has started on this question, again with the collaboration of Vlerick Business School, but the 2019 EPCA Annual Meeting provides an ideal opportunity to take the conversation forward. To do that, it was agreed that it would be useful to hold a ‘Digital Café’ during the Annual Meeting. This concept was used to good effect at the 2018 workshop on digitisation in Brussels and will once again be moderated by Ann Vereeke, partner at Vlerick Business School.

The Digital Café will create a framework for a series of short and tightly focused discussions in a small round-table format, with strictly limited participation, with the aim of discussing the impact of sustainability and climate change on the chemical supply chain and identifying whether there is an intersection with digitisation. “We want »

to see what the group feels,” Verstraeten says, “and though it may be early days perhaps we can inspire our members to adjust their mindsets.”

“At the end of the day, we’re trying to provide a service to our members,” Verstraeten says. “If this is a topic they want help with, we will look more deeply into it.”

RAIL TO THE FORE One obvious route to delivering a more sustainable supply chain is the use of intermodal transport, which implies greater use of rail. But over recent years, issues such as the Rastatt closure and continued problems with interoperability have put a limit on how prepared the chemical industry has been to embrace the rail mode.

It comes as no surprise, then, that the logistics and supply chain business session during EPCA’s 2019 Annual Meeting will have a strong focus on rail, with presentations by Clemens Först, spokesman of the board of Rail Cargo Group, and Bernhard Kunz, managing director of Hupac Group. Verstraeten says: “There is a lot of development coming in rail, especially around Antwerp,” which is timely given the planned roadworks that will temporarily add to road congestion around the port. Först and Kunz will be joined at the session by Jacques Vandermeiren, CEO of the Port of Antwerp, which hosts Europe’s largest integrated oil and chemical cluster and the selected location of megainvestments for the sector. Vandermeiren will illustrate the strategic role that ports like Antwerp play today in the security of the supply of the European petrochemical industry, the supply chain of which is not only regional but global.

“We will also touch on pipelines as a valid alternative and actually one of the most efficient ways of moving big material flows,” Verstraeten says, concluding by saying: “It’s a journey. We need to bring some value to EPCA members and open their eyes.” HCB