Scottish Enterprise: Roundtable

Sharing a vision

Scotland already has a lot going for it when it comes to developing a sustainable chemicals industry, and should build on its strength in diversity, its skills and talent base, effective industry/academic collaboration and sector clustering

For a country of its size, Scotland already boasts a significant and successful chemicals industry. And it’s one all parties want to see develop over the next decade or more. The question is, how best to ensure the sector can drive sustainable growth in what is a very competitive global industry.

Paul Hodges, right, sums up the Roundtable and elaborates the vision for 2025; Tom Shields is on his right

A few weeks ago, ICIS and Chemical Sciences Scotland brought together industry leaders from both large and small companies, academics and government representatives in a high-level Roundtable in Glasgow to air their views on the way forward and see what the industry might look like in 2025 and beyond. The discussion was moderated by Paul Hodges, chairman of International E-Chem (see page 8 for his concluding comments).

The good news is that development in the country is starting from a strong position: it has a major base chemicals centre in Grangemouth, recently given a new 15-year lease of life by INEOS through innovative feedstock sourcing; it has world-class standing in science at half a dozen key universities, and a strong pharma and fine chemicals sector, consisting of leading firms as such as GSK, Syngenta and DSM.

To cap it all, agreed the Roundtable participants, industry, universities and Scottish government, have created a climate of collaboration and networking that is already paying significant dividends. Through bodies such as Chemical Sciences Scotland and ScotCHEM and by creation of centres for innovation in continuous processing and industrial biotechnology, companies are encouraged and enabled to collaborate and innovate.

The diversity of Scotland’s chemical and pharma sector was held up as a key strength and definitely an opportunity for further growth, not an issue. The fact that few companies actually compete with one another enables collaboration to take place without problems of competition, noted Sandy Dobbie, chairman of Chemical Sciences Scotland.

“We have been turning our diversity into a strength”, he commented. “Companies have to be careful where they collaborate but luckily we do not have a lot of competitor companies – most are selling and buying globally – and so they can collaborate and help each other without anti-trust issues.”

Collaboration is key
This industry and academic collaboration is especially beneficial to the smaller and medium-sized companies that proliferate in Scotland, building innovative businesses based on its natural resources and strong academic and skills base. Alistair Cameron, CEO of family owned Scotmas, which specialises in water disinfection technology, noted that there is more collaboration in Scotland than the other parts of the UK.

“This is an opportunity. Our strength in Scotland is our technology base and experience and this forms the investment proposition for ‘Team Scotland’, in that we are not focused on one area and there is more collaboration. This will bring benefits to Scotland but needs to be driven from the bottom up. And we want even more academic collaboration.”

Innovative future
The two academics taking part in the Roundtable, Peter Tasker from University of Edinburgh and Russell Howe from University of Aberdeen, both expressed clearly academia’s desire to join with industry to create a viable and innovative future.

As Howe noted, “We are here to see how universities best fit into the scenario in the future for Scotland and take back what industry wants us to do better, providing the skills it needs. We see people as our primary product.

“We have the skills and expertise and world-leading research is going on – the key is communication. We need to know what is needed.” But he warned, the science base needs to maintain its breadth and depth to keep its global standing. “We can’t spend all our time solving industry’s problems. We are not there just to provide a pair of hands for the industry.”

Tasker added that collaboration between the chemistry departments across Scotland would soon be boosted as additional funding was on its way to make pooling arrangements through ScotCHEM even more effective.

The pooling of research activities in WestCHEM and EaStCHEM university groups has proved very valuable, he explained, and proposed new funding, to employ a director of pooling and training and build an effective database of what research is going on where, will improve things further. “We are trying to avoid companies spending too much time finding where to go for advice and collaboration.”

He too stressed that while universities are keen to be useful, they must not be pushed by government into narrowly defined areas that are currently thought to be useful. “We need to keep our breadth of expertise,” he advised.

But what of the government’s views and priorities? Julia Brown, senior director of life and chemical sciences, at development agency Scottish Enterprise, says its remit is to help companies grow and to explore where the new opportunities are for the sector in the future.

“We are looking for the themes and opportunities to move things forward in the next 5 to 15 years. We need to build capacity for the sector and to create the environment to support business. We already have a wide range of assets but need to see how we can grow. We need to elaborate a value proposition for Scotland for 2025.”

Brown explained that Scottish Enterprise would like to see a range of diversified companies investing in the country, in innovative clusters. But, she asked, “how do we use our resources and talent to ensure this? We have a good base already, with lots of SMEs, but how do we get to well connected innovative clusters in 2025? How can we achieve it?”

This point was picked up by Tom Shields, head of consultancy Spring Rise Associates. “We must have a clear focus”, he said, “on what Scotland can offer that is unique and special. There has been a lot of progress in the last 10 years by industry and academia but we need to sharpen our focus even more.”

He believes there is a need to leverage what has already been done and that a compelling proposition can encourage people to decide to invest in Scotland.

One of the main strengths that can certainly be built on is the chemicals cluster at Grangemouth, home not only to owner and operator INEOS, but to several other co-sited businesses, such as Syngenta, Versalis, FujiFilm and Cala Chem. Tom Crotty, board director at INEOS, 
explained that the future for the site was now secured for at least the next 15 years, after government and INEOS investment to enable US ethane feedstock to be imported to the site.

The next step in the journey is to develop UK gas production. INEOS is already investing in this to secure its longer term supplies from unconventional UK gas sources.

“We will be learning from our other operations around the world and have a vision of Grangemouth matching their performance. We have things right now in terms of energy base, people and integrated manufacturing capability – we need to get this raw materials feedstocks right and then exploit this through clustering and on-site investment.”

Infrastructure
Crotty cited the example of Antwerp, where INEOS has operated since 1998 and where it has seen a huge increase in size over the years as third parties have invested in the site – accounting for around half of activity today. “This is our vision for Grangemouth. To bring other chemical companies in. We are putting a great deal of work in around infrastructure and are analysing what role we can play in this effort.”

There might, thought Crotty, be scope for even larger future development around the Forth area where Grangemouth is located, if a pro-active Forth Port Authority could be developed, along the lines of Antwerp or Rotterdam. “This could lead to an industrial renaissance”, he said. “These port authorities are very customer focused groups and go out to attract investments at every opportunity. They can leverage shipping and storage rates… clustering has the most power on this scale.”

The second cluster strength that Scotland already has and build on is in the pharma/fine chemicals sector. This is more geographically distributed than the physical cluster at Grangemouth, with sites at Irvine, Montrose and several other locations.

Clive Badman of GSK and executive director of CMAC – the Continuous Manufacturing and Crystallisation Centre of Innovative Manufacturing – explained that there was a lot of change going on in the sector at present as loss of patented drugs and fewer blockbusters meant producers were looking to shorten the supply chain and reduce inventory.

In this respect, he said, “the industry is moving to more niche products and is thus looking for new technologies and ways of making its products. In the UK and particularly in Scotland we have some fantastic resources and academically we punch above our weight but we do not always convert good ideas to industrial solutions.”

The CMAC centre is a great example of the way Scotland can do this effectively, he said. It brings together academics and industrial users as well as the industrial supply chain, to solve global industry problems. It is helping scale up novel technologies to make them industrially viable and to enable the industry to move from batch to continuous processing.

But, he added, it needs more skills to be developed in this area – even with the current tranche of 45 PhDs coming out of the initiative, this is not enough to drive a platform change in the pharma sector.

Technology
Also, he noted, industry and Scotland needs to invest in a national demonstration centre for new technology, to be able to drive the development of new processes cost effectively.

This centre and the newly created Industrial Biotechnology Innovation Centre (IBioIC) are both key developments in driving effective industry and academic collaboration and promoting innovation. Other initiatives include the CRITICAT Centre for Doctoral Training, hosted by St Andrews, Heriot-Watt and Edinburgh Universities to provide PhD training across homo-, hetero- and biocatalysis as well as reaction engineering.

One of the main requirements for innovation to be really effective, noted Ian Shott, chairman of IBioIC, is to have skilled technology translators who can act as interpreters between companies and academics, to define what exactly the problem is and how it might be solved.

“There has been a big shift in the industry from developing new products to delivering products with better performance and better economics. This calls for a new mix of skills and solution-driven expertise, encompassing natural sciences and computational power.

“We need to leverage academic power and need to have technology translators – it’s a very skilled job and not sector-specific. Scotland has done a lot here and needs to leverage it. There is a lot of excitement and things have moved quickly and we are creating a landscape on innovation centres. We need to get the real strengths right and put capacity and power into them.”

To make full and effective progress, Roundtable participants argued that several areas need to be addressed effectively. One is energy and the need for Scotland to invest to provide economical power to the chemical industry. Tom Crotty noted that the country could exploit its natural resources more fully in this respect – especially hydroelectric power generation.

Scotland also has tremendous biological resources, which the national plan for industrial biotechnology will help realise the 
potential of.

Intellectual property
Another key area to get right is intellectual property (IP). Several participants argued that the Chemical Sciences Scotland and Scot-CHEM infrastructure should provide Scotland with an advantageous position to streamline procedures for setting up collaboration agreements and arrangements for protecting and sharing rewards from IP and will put Scotland in a strong position globally.

Ian Shott explained that IP management is sometimes a barrier to collaboration and although Scotland has made progress “if it could improve the situation further and have, say, as single body to oversee IP it could collapse a lot of barriers.”

Regulations, such as the EU’s Reach chemicals policy and biocides regulation were also raised as a barrier to future innovation, especially for SMEs, and finally, there was discussion around the need to help stimulate SMEs and investment through readily available funding and financing.

Alistair Cameron at Scotmas indicated that SMEs would be greatly helped by innovative funding mechanisms, especially in the gaps between debt funding, say, from the Scottish Loan Fund, and larger financing schemes.

These comments aside, the Roundtable was firmly optimistic about the potential and opportunities for the chemical sector in Scotland. With the future of Grangemouth assured, new innovation centres and skills initiatives underway and universities and companies working together to offer graduate and post-graduate learning and skills, Scotland is in a good place to look to 2025 and a successful, sustainable future.

Roundtable Participants

• Paul Hodges Chairman, International E-Chem
• Tom Crotty Board director, INEOS
• Sandy Dobbie Chairman, Chemical Sciences Scotland
• Alistair Cameron CEO, Scotmas Group
• Ian Shott Chair, IBioIC
• Clive Badman Executive director, CMAC
• Julia Brown Senior director of life and chemical sciences, Scottish Enterprise
• Tom Shields Chief executive, Spring Rise Associates
• Peter Tasker Director, ScotCHEM, and Emeritus Professor, University of Edinburgh
• Russell Howe Professor of chemistry, University of Aberdeen

SCOTLAND’S 2025 VISION FOR GROWTH

Paul Hodges, right, sums up the Roundtable and elabo- rates the vision for 2025; Tom Shields is on his right

If all develops in line with the Roundtable discussion, within 10 years, Scotland’s chemical and pharma sector will be providing its customers with products that deliver greater performance and are more economically affordable. It will be much larger and also exporting more.

There will have been a convergence between bio-, physics, chemistry and computational sciences, and companies will be operating with a solution orientation.

Technology translation will thus be a core skill and there will be a landscape of relevant technology centres. Investment in biorefineries wll also be well underway.

Scotland itself will be operating as a cluster, and this concept will be replicated in different ways in different functions and industries to enable companies to “work around” silos and produce solutions.

Spectacular new science will have been developed in formulation and there will be an ability to solve big complex problems, with research progressing through to the provision of real-life solutions via strong collaboration between industry and academia.

Examples will probably range from world-leading expertise in crystallisation across to marine products. The development process will have built on the concept of diversity to avoid focusing on a few “big bets”.

There will be a Europe-leading cluster at Grangemouth based on a portfolio of advantaged feedstocks and a virtual cluster based on the pharma/fine chemicals supply chain.

Scotland will also have built strong SME collaboration around customer-facing businesses. The university base will be carrying out broad and deep research linked to effective delivery methods.