The view from Kuwait
In a special interview for GPCA Insight, Nadia Al Hajji, CEO, PIC, discusses new investment opportunities for the company in the near future, the role of the region’s youth in driving a sustainable tomorrow and the importance of realizing PIC’s 2040 strategy in line with Kuwait’s National Vision
What are some of the key challenges facing the GCC petrochemical industry currently and how is PIC taking on these challenges?
The global petrochemical industry faces various challenges, such as slow economic growth, oil price fluctuations, intense geopolitical conflicts and trade barriers. The GCC countries play a big role in the petrochemical industry and need to face increasing volatility and uncertainty, as the region deals with the impacts of these geopolitics going forward.
Concern over oversupply that the industry is facing poses a big challenge for producers who need to cope with much lower margins and the need to address rising concerns over the environment which is accelerating the energy transition. Companies are investing in technologies and processes to reduce emissions, improve energy efficiency, and promote circularity. However, these are much more challenging, given the current economic state of the industry and short-term negative outlook.
PIC is addressing these challenges by diversifying its product portfolio and exploring new markets, and by focusing on talent development and collaboration to drive growth and maintain a competitive edge. The company also plans to expand and strengthen its position through trusted partnerships in future projects and initiatives.
Can you tell us more about your 2040 strategy, considering the dynamic global environment in which PIC operates? How are you planning to meet your objectives, while successfully navigating the uncertainty and ongoing disruptions facing petrochemical players from all sides?
As the arm of the Kuwait Petroleum Corporation (KPC) with regards to petrochemical activities, PIC looks forward to increasing its competitiveness and seizing the opportunities available to enter sustainable global markets by continuously observing and analyzing the growing demand for petrochemicals, taking into consideration new environmental regulations and restrictions. PIC is committed to the KPC 2050 Energy Transition Strategy, which aims to achieve net-zero targets. The company has already developed a long-term strategy to integrate green petrochemicals, circular economy, and sustainable initiatives into current and upcoming projects with the aim of increasing energy efficiency, making the most of materials, and reducing their waste through recycling, which ultimately leads to reducing waste and thus reducing carbon emissions.
PIC’s 2040 strategy is to continue to expand its core and derivatives petrochemical portfolio inside and outside of Kuwait by building new grassroot projects and expanding existing facilities, and by forming new joint ventures or entering into merger and acquisition opportunities. We have a successful track record of partnerships and hope to continue working with our existing partners and building new partnerships to achieve mutual growth opportunities. The target is to produce no less than 14.5 MMTPA of core petrochemicals, and no less than 1.2 MMTPA of derivatives, while achieving 15% of total equity capacity additions domestically by 2040.
At the Annual GPCA Forum, you’ll be participating in the executive panel about industry consolidation in chemicals. What in your view are some of the key drivers in M&A deals for regional chemical producers? When considering M&As what should chemical leaders look for?
Some key drivers in merger and acquisition deals for regional chemical producers include market consolidation, accessing new technologies or markets, achieving economies of scale, enhancing synergies and competitive advantage.
When considering mergers and acquisitions, chemical leaders should look for strategic alignment, complementary capabilities, synergies, and financial viability. It’s important to assess the potential for growth, market positioning, and the ability to generate value from the deal. Thorough due diligence and careful evaluation of risks and opportunities are crucial for successful mergers and acquisitions in the chemical industry.
Is PIC currently seeking new investment opportunities and if so, can you tell us more about your strategy?
In line with PIC’s vision “To be a global petrochemical company committed to adding value to Kuwait’s national resources”, the company is currently evaluating several acquisition opportunities with leading companies in the energy and petrochemical industry. These investments are located in various parts of the world and are distinguished by their proximity to high-demand consumer markets, which enhances the economics of the projects.
When evaluating these opportunities, several factors are taken into consideration, such as the project’s contribution to achieving PIC’s 2040 strategy, and the expected production quantities, with a focus on achieving leadership in the production of priority core petrochemicals such as polyethylene, polypropylene, and mono ethylene glycol, and specialized/derivative petrochemicals that are linked to core products, such as polyols and propylene glycol ether.
Is there anything else that you would like to highlight?
PIC is planning to expand its portfolio through its project “Olefins IV”. The project is well positioned to be able to leverage on a long-term favorable supply of ethane within the country, pursued in alignment with KPC and PIC’s long term strategic plan to strengthen its position as a petrochemical leader and indeed fulfil PIC’s strategy to grow in core business and to expand into specialty products. In addition to that, this project will secure job opportunities for locals and will open up several other opportunities for local content participation.
What is the role of the youth in the GCC region in leading the petrochemical industry in the future and how can companies help to develop and foster this valuable untapped resource – the young local talent?
The youth in the GCC region have a critical role to play in shaping the future of the petrochemical industry. Young professionals often bring fresh perspectives and are typically more adept at embracing new technologies and innovative processes. They are more environmentally conscious and can lead initiatives in renewable energy integration and carbon footprint reduction in petrochemical processes. Young professionals often have a global mindset, enabling them to foster international collaborations, which are vital in an interconnected global industry, like petrochemicals.
Companies can foster young talents through focused education and training, mentorship, promoting research and innovation, encouraging entrepreneurship, and creating an inclusive and technologically advanced work environment. By doing so, they not only invest in the future of the industry but also in the sustainable development of the region.
PIC’s strategy has given utmost priority to human resource development due to its belief that the human element is the basis of any business success. It’s worth mentioning that the company executed a program to train employees through local and global partnering companies to exchange knowledge, expertise, and best practices. On the other hand, the company also created an internal training program called “On Job Competency Development (OJCD)” that focuses on developing technical competences of all employees by transferring direct knowledge and experiences related to their designated roles and responsibilities in an organized and practical manner from experts to workers during the fiscal year. The program was met with great acceptance and success within the company due to its importance in preserving acquired experiences and accumulated knowledge. By doing so, this will enhance the capability, accountability, and commitment of the employees.
What is the importance of diversity and inclusion (D&I) at chemical companies today? As a D&I champion yourself, how do you ensure that you have the right strategy in place to successfully incorporate D&I in your company’s culture?
KPC Group is the pioneer of Diversity and Inclusion (D&I) in the region. We believe in harnessing the power of all skills and creating a diverse and inclusive workplace. D&I is crucial in chemical companies today for several reasons. Firstly, D&I fosters innovation and creativity by bringing together diverse perspectives and ideas. With the challenges the industry is facing and the requirements of energy transition and transition to green chemicals, D&I helps companies better understand and cater to a wide range of issues and opportunities. Additionally, D&I promotes a positive work environment, boosts employee morale, and enhances employee engagement and productivity.
To successfully incorporate D&I in a company’s culture, it’s important to have the right strategy in place. This includes:
- Leadership commitment: Senior leaders demonstrating strong commitment to D&I and setting the tone from the top.
- Inclusive policies and practices: From recruitment to promotions to training, etc. Reviewing and updating policies and practices to ensure they are fair and inclusive and promote diversity at all levels of the organization.
- Transparent merit system which recognizes the individual for their performance and performance alone.
- Accountability and measurement: Measuring and tracking progress on D&I initiatives and holding leaders accountable.
We strongly believe in the young talent we have in our organization and our role is to ensure that talent pool remains rich and diverse, engaged and connected, to efficiently prepare the next generation of future leaders within the industry.