INSIGHT: EPCA revisits chem cluster think-tank

24 June 2008 16:42  [Source: ICIS news]

Europe sees benefit to combined approachBy John Baker

 

BRUSSELS (ICIS news)--The idea of deriving further benefits from Europe’s already well established chemical clusters has taken a step forward.

 

Representatives from producers, logistics service providers (LSPs) and cluster organisations recently met under the auspices of the European Petrochemical Association (EPCA) to hammer out priorities for progress.

 

But given the number and variety of parties involved and the cross-border nature of many of the issues, progress is by no means a straightforward matter.

 

There was broad consensus on the priority issues and what needs to be done but much work lies ahead to identify who is willing and indeed able to take matters forward, especially in the multi-cluster region of northwest Germany.

 

The half-day meeting was a follow on from last autumn’s publication* of the findings of an EPCA supply chain think tank.

 

This made several recommendations for improving the competitiveness of Europe’s chemical clusters, focusing on two areas - the mega-cluster region encompassing Antwerp, Rotterdam and Rhine-Ruhr (designated ARRR) and Tarragona, in Spain.

 

The report set out a series of conclusions and recommendations:

* First, that information sharing between all cluster stakeholders must be improved, if the desired improvements in supply chain efficiencies are to be realised;

* Second, that at cluster level, voluntary cooperation between producers, LSPs, customers and authorities must be enhanced and facilitated through the setting up of a cluster platform;

* Third, that coordination between clusters should be improved, facilitated by the creation of a pan-cluster platform to coordinate cross-border issues, such as harmonisation of safety, tax and customs regulations, improved logistics infrastructure and removal of logistics bottlenecks.

 

Information sharing is not simply a matter of producers providing forecasts for LSPs, it needs “a willingness to share knowledge about capacities and flows, with a view to improving asset utilisation and driving other efficiencies”, said Paul Gooch, CEO of The Logical Group and chair of the ARRR think-tank group.

 

It also needs better insight into congestion, land use, material flows and infrastructure constraints, in order for authorities to value investment proposals.

 

“Cluster authorities as well as national and local government and the European Commission will need to become partners in this information sharing process and in the development of the clusters,” he added.

 

Also, he noted, there is a need for chemical clusters to be effectively managed and supported by an appropriate organisation.

 

In many cases, this is simply not the case at present, as many, if not most, clusters have grown up on an ad-hoc basis, based around feedstock integration.

 

There is, for instance, said Gooch, no single coordination body active in Tarragona or the ARRR, to support cluster-related information exchange. “Isolated initiatives will not exploit the benefits of the clusters,” he said.

 

On the question of developing local cluster platforms, Fred du Plessis, president of the European Chemical Site Promotion Platform (ECSPP) and a member of the Tarragona think-tank group, said that these must develop a strategic vision of the future developments of the cluster and its interconnections.

 

The platforms would “coordinate activities needed to enhance the strengths and eliminate the weaknesses of the clusters, facilitate improvement of the clusters’ logistics infrastructure and facilitate closer collaboration of all involved stakeholders”.

 

This “should lead to better management of the clusters, more synergies and more investment in the logistics infrastructure”, he said.

 

A pan-European cluster platform, he added, would provide a neutral action-oriented forum with the objective of improving the general competitiveness of the clusters and facilitate improvement of the logistics infrastructure between clusters, as well as setting common performance indicators and benchmarks.

 

This too “should lead to more investment in logistics infrastructure, aiming at a better interconnection of the clusters”.

 

The goals are clear and the benefits attractive enough - any improvements in supply chain efficiencies would be most welcome to producers and LSPs alike.

 

But there are a number of clear challenges, not least the balancing of company self-interests and the longer-term industry-wide benefits that might accrue. A further major hurdle will be in identifying and establishing local leaders in each cluster, to the satisfaction of all stakeholders.

 

Should the role of platform coordination fall to existing national chemical associations, the port authorities, where they exist, or even to regional government bodies? And what, if they can be formed, should be their mandate?

 

But overriding all these difficulties lies the one identified in the title of the think-tank report - the paradigm shift that is required to move to a much more collaborative approach to doing business in and between the clusters.

 

Are the producers and LSPs sufficiently ready to make this shift, or will the initiative flounder on vested interests and lack of information sharing?

 

For the sake of all the work put into the cluster initiative, that would be a great pity and hold back Europe’s overall competitiveness in the sector - which cannot be afforded given the challenges from the Middle East and Asia.

 

* “A paradigm shift: supply chain collaboration and competition in and between Europe’s chemical clusters” was presented at EPCA’s annual meeting in Berlin last September.


By: John Baker
+44 20 8652 3214



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