Interview

'ADAPT Helped TCL Focus on Cost and Conservation Measures'

Posted on 28 January, 2010 | Tags:

Dr Aroop Basu, COO, Tata Chemicals Ltd shares his opinion on few of the key issues for the chemical industry in an e-mail interview with Chemical Engineering World

 

Dr. Aroop Basu
COO, Tata Chemicals Ltd

How much time may it take for raw material prices to stabilize, as signs of economic revival become visible?
Raw material prices have undergone some correction and appear to head towards some stability.  However, ocean freight rates continue to be volatile and hence the landed prices (CFR) continue to be erratic.  The volatility is further impacted by routes and category of vessel (eg handymax, supramax).  If the vessel has to cross the red sea, a premium is charged and this induces further complications. Finally, growing demand from the Indian utility sector and stabilizing steel production in China and India make it difficult to forecast when real stability will be experienced.

How do you see the growth of soda ash during the current scenario in the Indian and global markets?
In FY10, we expect a growth of about 8-10 percent over FY09.  However, the growth in global markets is likely to remain flat to perhaps about 2 percent with demand picking up in the last quarter of FY10.

May we have your comment on the safeguard duty extension of 20 percent safeguard duty on soda ash till April 2010 against China?
Most Indian soda ash users operate only in the Indian market and for them, from a competitive position perspective, this move is neutral as the duty is applicable for anyone who imports from China.  The only exception is Export-Oriented Units (EOUs) as duty is not applicable for imports against advance license.
In the immediate term, the implication of this duty is that Chinese soda ash will be a little dearer for the Indian market.  However, soda ash is a globally traded material and India imports it from many countries so even if one argues that imports from China will reduce, there is always material available from other countries. So the domestic soda ash industry will always need to remain competitive.  This duty however will encourage domestic players to invest in modernization and growth initiatives and in the medium to long-term, this approach will benefit the entire value chain by making it even more competitive. 

SHE has always been much talked about than actually practiced. What is the approach the chemical industries must adopt towards reducing the operational hazards and reducing the carbon footprint?
Striving for excellence in SHE is not unique to the Chemical industry.  The three elements are applicable in equal measure for society and even for humanity at large.  The elements and manifestation will naturally vary depending on scale and scope of an entity.
Chemical industries may consider the following five vectors to become a role model in this area.

• Redefine 'waste'.  The industry must strive towards eliminating what is termed "process waste" while processing any natural resource.  Only a culture of innovation can make this happen in a meaningful way.  This principle may be extended to agricultural produce as well such that chemical processes are designed to yields a series of products rather than a combination of one or two products and process waste.
• Value 'water'.  Industry must engage with government and civil society to view water as a precious resource and raise awareness levels regarding the water value chain.  In India, there needs to be advocacy to treat water as a national subject and not a state subject even though this looks near impossible in the current political climate.
• Develop new products on an alternative 'bio-refinery' platform that provide identical functionalities to products from the hydrocarbon value chain.  This will call for greater ability to manipulate matter at an atomic level and build competencies around molecular manufacturing.
• Build abilities in sustainable natural resource management.  Develop techno-scientific capabilities to accelerate knowledge based agricultural intensification and improve capacity to deal with abiotic and biotic stresses. This will require significant improvements in our understanding of the way nature operates and use of principles of bio-mimicry.
• Invest heavily and participate in human resource development for the Chemical industry.  This includes participating in curriculum development right from K-12 levels through to institutes of higher learning.  There is an acute shortage of essential trade skills and this is another area where a private-public participation model can function effectively

In your opinion, what initiatives should the Government and Industry take together to make chemical process industry a safer place to work?
Together, Government and Industry can create multiple opportunities and platforms for two-way engagement and communication encompassing industry, government and civil society as represented by not for profit NGOs. Co-creating common standards and yard sticks for specific industry segments within the chemical sector. A reward- penalty system that encourages excellence in safety but also penalizes organizations that are delinquent too may be considered. Larger corporates should be encouraged to mentor smaller units or units within a larger geography to step up the safety measures. Build-in relevant facets of safety within the course curriculum for practitioners in the chemical industry can further emphasize the concept of inherent safety. To increase safety in transportation of chemicals, a focused intervention specifically designed to cover all aspects should be co-developed by the Government and Industry.
It is important to develop common understanding of what constitutes emergency response when a chemical incidence occurs. And finally creating strict enforceable rules around proximity of habitats to chemical sites that are classified as high hazard.

TCL has been conferred with the prestigious 'Best Innovation in CSR' ICIS Innovation Awards 2009' for the initiatives taken by the company at its Mithapur Facility. Can you tell us more about this?
This award is valuable for three key reasons.  First, it is an objective yet public recognition of work that the environment management team at Mithapur has spent almost a decade on. Hence it will energize the team.  Second, it is an example of the potency of the troika of innovation, dedication and diligence in serving equally, the dual causes of 'desh' and 'dharti'.  Third, it reinforces our belief that sustainable development occurs best in a partnership/participatory environment built on diversity, trust, mutual respect and an ardent desire to expand the current frontiers of science.

Please tell us more about the ADAPT program and how has this added to the company's profits?
The Actions for Downturn Alleviation and Profitability in Turbulent Times (ADAPT) initiative was centred on three pillars, Cost and Procurement, Capex and Cash Generation.  The objective was to build our 'war chest' and ensure rapid cash generation to handle current and future business requirements. The initiative helped us to focus on costs and cash conservation measures across the enterprise with a renewed vigour.  The critical success factors were the MD's assurance at the outset that there would be no job losses and the fact that the initiative was entirely managed by dedicated internal resources.  Additionally, the initiative was very well structured and was implemented using a robust and disciplined process.  The engagement of the leadership team was very high and the organization rank and file felt they needed to respond to the trust reposed in them to do right by the organization.  A number of innovative ideas were generated and implemented since every person in the organization felt that he/she had a valuable role to play in this process. In summary, ADAPT successfully aligned the entire company workforce and this led to a successful outcome even though the global economy was falling off a cliff.