07 October 2013 22:47 [Source: ICIS news]
BERLIN (ICIS)--LyondellBasell will focus on the flexibility and reliability of its European operations as it addresses critical cost and profitability issues, the head of the company’s Europe, Asia, international olefins and polyolefins business, Bob Patel, said on Monday.
“We need to focus on quality, reliability and flexibility of our operations,” he said on the sidelines of the 47th European Petrochemical Association (EPCA) meeting. “The commodity side of the [polymers] business is going to be dynamic.”
The Netherlands headquartered producer is transferring what has been learned on greater cracker flexibility and operational excellence to its already well-performing assets in Europe. It converts olefins in the region into a number of differentiated polymer products but also into a range of commodity polymers.
Patel believes that LyondellBasell has the opportunity to improve its feedstock position in Europe by introducing greater cracking flexibility.
It has been restructuring hard in Europe since 2009 when the disconnection between the performance of its olefins and polymers business in North America and Europe particularly became more clearly apparent. The company benefits greatly in the US from the low-cost natural gas liquids (NGLs) feedstock environment.
“We’ve done quite a bit in terms of rationalisation [in Europe],” Patel said. The company has closed 1m tonnes of polyolefins capacity in Europe since 2009. It will close its refinery at Berre in France at the end of this year. The capacity was taken out of the market in early 2012. The cracker at Berre is more competitive now that the refinery is not there, Patel said.
Since late 2010, employee numbers in Europe have been cut by 30%. Last week the company closed 100,000 tonnes/year of high density polyethylene (HDPE) capacity at Wesseling in Germany.
The company has cut back in research and development (R&D) significantly in Europe to “provide more focus on the projects that provide more potential”, Patel said. The company is thinking more along the lines of a market pull approach to R&D rather than a technology push model.
“We think of everything in terms of return”, Patel said. “We have to continually evaluate the factors that drive competitiveness.”
The annual EPCA meeting runs from 5-9 October.
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