INSIGHT: OQ Chemicals re-thinking business model as sustainability looms larger

LONDON (ICIS)–Greater flexibility in terms of corporate structure and strategy has helped major oxo chemicals producer OQ Chemicals begin to implement a far-reaching net zero sustainability drive and to realign the company for the future.

“We are really re-thinking our business model,” CEO Oliver Borgmeier said in an interview with ICIS at the end of April, following the launch earlier in the month of the company’s ‘reduce’ pathway to climate neutrality.

The company, created as Oxea from well-established oxos assets by Advent International in 2007 and sold in 2013 to the then Oman Oil Company, latterly OQ, has since the middle of last year struck out on a different path.

Around that time the Sultanate of Oman was reviewing its hydrocarbons capabilities and the matrix structure of operations under the OQ umbrella due to pressure from the pandemic and a relatively weak oil price.

OQ is described as an optimised energy company that has centralised Oman’s oil and gas assets operating in nine business units across the value chain from upstream oil and gas through refined products, liquefied natural gas, and chemicals and polymers to product supply and trading.

The structural review gave OQ Chemicals the ability to change things, Borgmeier stressed, the opportunity to “be bold and brave in the way you do things”, clearly assisted by the new thinking brought to the table by the company’s Omani owners.

Director of sustainability Ina Werxhausen outlined the opportunities that were grasped to not just go back to earlier ways of doing things but utilise a grass roots approach to sustainability. Alongside a redefined structural model this was used to set short, medium and long-term climate targets that built on earlier ISO 50001 certification and then on-site specific greenhouse gas reduction targets. Already in the third year, this helps accelerate the continuous improvement process and to bring it to bear more effectively on the climate challenge.

“We are willing to look at [sustainability] solutions that before were not that high on the agenda,” Werxhausen said. “To be creative now you have to be open to do so and generate something new.”

Wholly owned by the government of Oman, OQ Chemicals is not just copying what went before. A new corporate structure is built around three pillars: the production and sale of Oxo Intermediates, broadly aldehydes, alcohols, esters and polyols and Oxo Performance Chemicals, higher aldehydes and specialty derivatives, carboxylic acids, specialty esters and amines.

The company uses the well-established hydroformulation, or oxo, process (which itself uses synthesis gas, a mixture of carbon monoxide and hydrogen), and raw materials such as propylene, ethylene, butene and higher olefins. It has six production sites and a broad customer base for 70 products which generate an annual turnover of €1.4bn.

Its three key strategic pillars are strengthening the oxo intermediates and performance chemicals business – particularly growing in the latter – and striving for functional excellence, the drive which underpins improved sustainability for the company overall.

These are embedded more now not just on process optimisation and performance but on the possibilities for further climate-driven change. OQ Chemicals production processes are exothermic, for example, and the heat generated is used in Germany to supply domestic heating.

In some respects, therefore, the company already adopts a circular approach to its outputs.

There are waste streams from the plants that can but utilised to reduce the company’s carbon footprint. It is also offering alternatives to its fossil-based portfolio and says that it will expand this continually.

Borgmeier said that OQ Chemicals is focused on big goals. First it is developing its ambitions for 2026, with the ‘reduce’ target of an 18% reduction in global greenhouse gas emissions from a 2017 base and later come 2030 (-30%) and mid-century (climate neutrality) targets.

“We will experience changes in demand,” the CEO added. These will be related to decarbonisation, demographics – which he sees as different in Europe and the US, for example – and digitisation.

A primary goal is to try to reduce volatility in the oxos area and to grow derivatives capabilities. The latter has seen completion of a TCD alcohol DM (tricyclodecanedimethanol) expansion at its Oberhausen, Germany site and a carboxylic acid capacity expansion project. TCD alcohol DM finds use in exterior coatings, electronics and 3D printing, for example. Carboxylic acids have wide ranging applications, the recent capacity expansion from OQ Chemicals for a product targeted at refrigeration lubricants.

“We have a very good understanding of where we stand,” Werxhausen said regarding the sustainability push at OQ Chemicals and she sees five years (to 2026) as a good time horizon. It is good for colleagues [within the company] to have something to chase, Borgmeier suggested. Targets within the company are clearly becoming more ambitious. Years of transformation under the Oman-led infrastructure, which involved the whole organisation and, clearly, some out of the box thinking, is being addressed anew.

With OQ reportedly continuing to review the development of its extensive asset base, there is nothing specific to report on chemicals, the OQ Chemicals CEO said.

OQ had bundled process technology know-how for oxo intermediates and oxo derivatives from the Oberhausen, Germany and Bay City, US plants and clearly acquired Oxea for market access downstream. How the Sultanate uses that know-how and expertise, remains to be seen.

Interview article by Nigel Davis