INDUSTRY INSIGHTThought Leadership

Industry must focus on digitalization, ESG and supply chain diversification

GPIC discusses the trends that will reshape the regional chemical industry landscape in 2022

2020-2021 were two exceptional, very challenging years for the chemical industry, the world, and businesses at large. What are your reflections on the last two years – e.g., how has the landscape changed for chemical companies today from a business and socio-environmental and economic perspective?

Like other industries, the chemical industry also suffered with the onslaught of the pandemic. Critically, the pandemic restricted the free movement of raw materials, products and human resources the essentials to keep industries running. However, the chemical industry learned a number of significant lessons because of the pandemic that changed business processes and improved organisational effectiveness. I think that today the landscape for the chemical companies has changed because:

  • When major supply and demand disruptions occur, there needs to be a focus on preserving or reinventing value chains and supporting diversification.
  • Industries need to be proactive in digitalizing business processes. There needs to be investment in IT infrastructure and automation of processes, work and applications.
  • Companies need forward looking leadership, robust risk management, resilience, adaptability and a proactive approach.
  • There needs to be a local approach to the challenges of issues such as COVID-19, namely, partnerships with the private sector, locally and community driven solutions, as well as constant cost optimization.
  • There is a greater sense of sustainability and chemical companies are looking more and more at decarbonization technologies.
Yasser AlAbbasi, President, GPIC

As a major producer and exporter of agri-nutrients in the region, GPIC is closely affected and connected to the food security challenges and opportunities facing the region and the world. What more can the agri-nutrients industry do to contribute to food production that’s environmentally sustainable and economically viable at the same time?

Food security is about sharing opportunities; it is about trying to be successful in making the world a little bit better, by creating ‘win-win-win‘ situation for us, our stakeholders and the planet.  Much more effort and innovation is urgently needed in order to sustainably increase agricultural production, improve the global supply chain, decrease food losses and waste, and ensure that all who are suffering from hunger and malnutrition have access to nutritious food.   Land, healthy soils, water and plant genetic resources are key inputs into food production, and their growing scarcity in many parts of the world makes it imperative to use and manage them sustainably. Boosting yields on existing agricultural lands, including restoration of degraded lands, through sustainable agricultural practices would also relieve pressure to clear forests for agricultural production. Wise management of scarce water through improved irrigation and storage technologies, combined with development of new drought-resistant crop varieties, can contribute to sustaining drylands productivity.

World hunger increased in 2020, as the prevalence of undernourishment grew by 1.5% in one year, reaching a level of 9.9%. How did the regional agri-nutrients industry contribute to abating this challenge over the last year or so, and what can be done moving forward to build resilience on a company but also industry level against future black swan events, such as the COVID-19 pandemic, and natural disasters?

For the world’s poor and vulnerable, a lack of personal savings, the inability to store food beyond a few days, weak and un-organised agricultural and food chains, overstretched public services, and major disruptions to supply and demand are putting food security at risk, especially for women and children. This is compounded by the fact that vulnerable populations already experience the burden of malnutrition and the associated negative health outcomes.

We believe it is important to embrace the 17 UN Sustainable Development Goals ( SDGs) and mainstream them into business portfolios. Strategies need to evolve to support the needs and development of the regional and global sustainability portfolio. As we move forward, circular economy, climate action, carbon neutrality by 2050, will play a major role in future strategies. We have to continue enhancing our plant efficiency, with reductions in energy consumption and CO2 foot print and consider investing in carbon free technologies where ever and whenever possible such as blue Ammonia etc.

When the industry is transformed, with greater resilience to major drivers, including future black swan events, balanced nutrition will ensure low cost and balanced diets that are sustainable. This will enable the agri-nutrient industry to move closer to its goal of eradicating undernourishment and improving food security for everyone.

Strengthening the GCC’s self-sufficiency agenda on food security and nutrition is an important imperative for governments and the industry in the region. What in your view are the key enablers for driving food security in the region, and how can regional stakeholders work together to achieve these important objectives?

GCC governments took immediate action to stabilize food supplies that were critical in overcoming the disruptions due to COVID-19.

GCC countries are considered among the more food-secure considering the availability, affordability, quality, and safety of food supplies. However, the region is very dependent on imported food, and is therefore very vulnerable to shortages.  During a disruption in supply chains, such as a pandemic, that reliance on imports leaves countries vulnerable to shortages.

In the longer term, governments will need to take comprehensive steps to generate sustainable results. That includes helping increase the productivity of local farmers, facilitating imports, reinforcing supply chains.

Local governments need to increase the local food supply. Implementing leading agricultural practices like genetically modified crops already in use elsewhere can make farmers as productive as possible.

Looking at the Annual Forum theme this year, what will be the key areas that GCC chemical companies would need to ‘Redefine, Reinvent and Reshape’ to emerge more resilient and successful in the new post-COVID reality? Feel free to offer a response from GPIC’s perspective.

Thanks to GPIC’s flexible policy which paves the way to maintaining its production capacity and sales through strategic adaptability to cope with market environments worldwide. The flexibility of the strategy that the company has implemented supports market diversification that enabled the company to manage the current pandemic.

As a whole, GCC chemical companies will have to take immediate actions that are likely to include the following areas, to remain successful:

  • Digitalization

COVID-19 has proved the effectiveness of remote working, and the next stage is expected to be of artificial intelligence (AI), robotic process automation (RPA), machine learning (ML) and other technologies.

  • The workplace and workforce of the future

GPIC is already working on future strategies to enable the safe and sustainable operation of its plants, whatever the future holds.

  • Environmental, Social and Corporate Governance

Now more than ever, there is an awareness of the negative impact we are having on the planet, and there is ongoing research into changing over energy supplies to renewable sources and on products that support CO2 reduction and an end to plastic waste.

  • Supply chain – Globalization and Localization

COVID-19 has highlighted the importance of supply chain diversification to a wider range of locations in order to allow business continuity and avoid disruptions.

  • Futuristic view

To move on from the COVID-19 crisis we will have to react in agile and decisive ways as we adopt a new normal.  We will have to build resilience with balanced strategies and quickly adapt to the new reality.

As the leader at the helm of GPIC, what are your plans for the company in 2022 and beyond? What can we expect to see from GPIC in the coming years in terms of key areas such as market growth, operational excellence, talent development, digitalization and investment?

GPIC’s business strategy is based on sustainability and sustainable development with a belief that “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change”.

Our effective and timely response to the recent COVID-19 pandemic is a testimony our resilience and adaptability to change.

GPIC’S smart and forward-looking approach has embraced the 5 P’S People, Planet, Prosperity, Partnerships, Peace. The progression upholds GPIC’S goal to become a part of the global transformation for a sustainable future.

GPIC plans for the year 2022 and beyond include:

  • Market growth: With China as its biggest single market for the chemical industry, the potential for other market zones also will be explored keeping in view the supply chain issues during pandemic like situations.
  • Digitalization: GPIC will continue to explore new ways to drive for digitization agenda.
  • Operational excellence and investment: GPIC will continue enhancing its plant efficiency, with reductions in energy consumption and CO2 footprint.
  • Talent development: GPIC continues to maintain its strong investment in people development by developing skills to ensure digital proficiency to build the capability of the company’s future leaders. GPIC’s entire workforce is committed to upholding the quality, production and safety standards despite all the challenges faced, and GPIC believes that investing in people increases employee loyalty.