Scottish Enterprise: Partnership fuels chemicals growth

Chemical Sciences Scotland is a powerful partnership between the industry, government and academia which speaks with one voice to secure the sector’s future

Copyright: Rex Features

Scotland’s chemical sector is a powerful engine for the country’s economy, with a turnover of £8.7bn ($13.9bn; €11.0bn), accounting for 28% of manufacturing output by turnover. The sector’s exports are worth £4.5bn and it directly employs 13,500 people.

It provides essential feedstocks and building block materials for many other downstream manufacturers across the region. Chemical jobs tend to be of high quality, with salaries averaging £35,400/year, and the gross value added (GVA) of the industry is £100,000.

However, the sector faces challenges – both regional and global. Many of the chemical companies operating in Scotland are part of global corporations headquartered elsewhere. Decisions made by these groups may reflect a global strategy, rather than what is best for local sites.

The commodity petrochemical sector relies heavily on the Grangemouth complex for feedstocks which are currently obtained from the declining North Sea oil and gas reserves, though that is about to change. The industry operates in a global environment in which the US shale gas boom is pushing European producers further up the petrochemical cost curve.

Recognising the importance of the sector to Scotland’s future prosperity, in 2007 a group of people and organisations with an interest in rejuvenating and growing the chemicals industry formed a voluntary partnership known as Chemical Sciences Scotland (CSS). The group – with interested parties from the industry, government and academia – aims to nurture manufacturing, research and investment across the sector including industrial biotechnology. The Scottish government recognises CSS as the voice of the industry in Scotland.

Caroline Strain, head of chemical sciences at development agency Scottish Enterprise, says: “Previously there was no cohesive group for chemical sciences. CSS has brought it all together, facilitated discussion and developed a strategic plan for growth.”

CSS developed and launched its strategy for growth in 2007 and updated it in 2012, setting an ambition to increase chemicals manufacturing exports from the sector by 50% by 2020.

To achieve its overall goals, the strategy set three major priorities:

• Increase export growth
• Develop solutions for a low carbon economy
• Boost collaboration between academia and manufacturing.

To address these objectives, four task-specific groups were formed, each to tackle one of four key topics: sustainability, innovation, skills and reputation and investment. Within the topics there are 10 key elements (see box, right).

According to Sandy Dobbie, who has chaired CSS since its inception, nurturing partnerships is the most important aim of the group. “It’s always been about creating a chemical sciences community so that people in the industry, academia, regulation and skills talk to each other and see the opportunities arising. There is a genuinely collegiate approach in Scotland,” he says.

Another one of its key objectives and achievements has been to raise the profile of the chemicals industry in Scotland. “It was regarded as a ‘Cinderella’ or ‘sunset’ sector; an industry which kept its head down with little focus from the government. Now the chemicals sector is seen as strategic,” Dobbie adds.

Improving the relationship between academia and industry has also been very important. “We had an extremely strong university sector as well as strong industry, but they didn’t work together. We’ve created much stronger linkage and helped improve Scotland’s capacity in chemical sciences research,” he states.

CSS has been instrumental in nurturing industrial biotechnology in the country (see below). Dobbie points out that Scotland has had very good biotechnology skills for many years, but they were previously focused on medical applications and life sciences.

“We had the skills, but they were focused on one end-market so we decided to get a focus on making stuff as well. It’s Scotland-based, but not Scotland in isolation – we want it to be a global centre of excellence so that global companies choose to do their research and development (R&D) in Scotland.”

COMPETITIVE ADVANTAGE
With the INEOS refinery and petrochemicals complex at Grangemouth and ExxonMobil Chemical’s plant at Mossmorran, Scotland is in the unique position of having two of only four crackers in Europe flexible enough to crack a high proportion of ethane.

The decision by INEOS – with government support – to construct an import terminal for US ethane at the site will allow it to grab some of the US shale gas advantage by using competitively priced feedstocks (see page 4).

Dobbie points out how important it will be for the UK to exploit its own shale gas reserves to ensure long-term survival. Scotland has substantial shale gas and coal-based methane deposits, which could be exploited.

“By happy accident, we have one of the few potential survivors. If we feed in US shale as a temporary measure followed by UK shale gas then we will have a European asset of critical importance to Scotland.”

Having that asset in place should also help to secure the future of downstream businesses which take feedstocks from the cracker. “It behoves us to maximise that strategically and build out, so not just chemicals but downstream operations benefit too. If we do the right thing this will be a game-changing opportunity for Scotland and the UK,” he says.

Industrial biotechnology (IB) has huge potential in Scotland. Not only does it offer sustainability benefits such as cutting greenhouse gas emissions and energy use, but the country is ideally placed for marine feedstocks such as seaweed and algae as well as whisky distillery by-products and agricultural/forestry waste materials.

The country already has a nascent IB sector, with 43 companies generating revenues of £189m and employing 1,100 people. In 
November 2013, CSS launched a Scottish 
National Plan for Industrial Biotechnology which aims to grow IB turnover to £900m by 2025 (see page 9).

Key elements include industry engagement, development of biorefineries and a national 
innovation centre, and nurturing of skills. A 
variety of R&D grants are available to help with 35-70% of start-up costs up to £600,000, as well as tax breaks and support with the development of collaborative teams. Financing for projects is also available up to £2m through organisations such as the Scottish Investment Bank.

According to Sarah Petrie, programme manager IB for Scottish Enterprise: “We’ve got very strong research capabilities within the universities. And the strength of our chemicals industry in a variety of products such as plastics and polymers gives a foothold into markets which we can exploit for industrial biotechnology.”

Biorefineries are a major thrust of the plan and there is an objective to have one large or some smaller units operational by 2025. She says a roadmap is currently being developed which aims to identify feedstocks available locally or importable economically.

“We need to consider our capacity, areas of expertise and markets where we can compete. That plan then needs to be openly consulted on so that we can refine the roadmap and have something to make more public … towards the end of the year.”

Another part of the plan is the establishment of a network of biotechnology innovation centres. An Industrial Biotechnology 
Innovation Centre was established in January 2014 which aims to support development of new products and manufacturing processes, provide skills needed by the industry and act as a centre of knowledge exchange to share best practice (see page 9).

Disruptive Technology
Supporting process innovation in the chemicals sector, the National Centre for Innovative 
Manufacturing in Continuous Manufacturing and Crystallisation (CMAC) has been formed as part of the Technology and Innovation Centre at the University of Strathclyde. It aims to accelerate the adoption of continuous manufacturing which is far more efficient than batch.

According to Scottish Enterprise’s Strain: “We’re keen to support this as disruptive technologies mean real improvements in manufacturing techniques. The challenge now is to ensure that we’ve got businesses in Scotland engaging in CMAC and to build up the supply chain to help the economic impact on Scottish businesses. We see this and the biotechnology plan really taking us some way down the path to sustainable manufacturing.”