Transcript HLG Conference in Usti, April 2009

Supply Chain Management & Logistics
Challenges for the Chemical Industry
in Central and Eastern Europe
April 16, 2009 - HLG Conference, Usti nad Labem, Cz
Wolfgang Schnabel
Sr Supply Chain Manager
Wolfgang Schnabel
Dow Olefinverbund GmbH
April 2009
Dow Olefinverbund GmbH
About Dow ...
 Founded in 1897 by Herbert H. Dow in Midland,
Michigan
 Supplies more than 3,300 products to customers
in more than 160 countries
 Manufacturing sites in 37 countries
 Employs 46,000 people globally
 Annual sales of $58 billion (2008)
 Europe:
 13,600 People
 Annual Sales of $22 billion (2008)
 Recent aquisition of Rohm & Haas strongly
positions Dow for the future to become:
“the world’s leading specialty chemicals and
advanced materials company”
Wolfgang Schnabel
Dow Olefinverbund GmbH
April 2009
EEGR: Dow’s Presence, Growth and Opportunities
●Continued business presence since 1960. About 500 Employees
● 30% yearly average growth in 2000 – 2007. +10% in 2008
● Dow EEGR: 32 states; about 500 million people; 50+ languages
● Russia, Poland and Turkey account for 60% of EEGR sales
● Attracting and developing local talents is a priority
● Investing in local production and JVs
Offices
● Bucharest (Romania)
● Budapest (Hungary)
● Kiev (Ukraine)
● Istanbul (Turkey)
● Lavrion (Greece)
● Moscow (Russia)
● Prague (Czech Republic)
● Warsaw (Poland)
● Zagreb (Croatia)
● Almaty (Kazakhstan) next opening
● Vilnius (Lithuania) next opening
Wolfgang Schnabel
Dow Olefinverbund GmbH
April 2009
Manufacturing Sites
● Balatonfüzfö, Hungary (for the production of STYROFOAMTM)
● Kryukhovo, Chekhov Region, Russia (STYROFOAMTM)
● Dilovasi, Turkey (Polyurethane Systems and STYROFOAMTM)
● Lavrion, Greece (Polystyrene, STYROFOAMTM)
● Łazy, Poland (Polyurethane Systems)
● In Vladimir, Russia, the JV company “Dow Izolan” is building
its new, large, state-of-the art plant in the PU Systems business.
Please kindly note that:
The content of the following presentation is shared and
developed in workshops with a variety of audiences over
The last two years.
The elements are supported by the Chemical Industry
in Central Europe, Logistic Service Providers, Associations,
Chambers of Commerce and other interested Parties.
Wolfgang Schnabel
Dow Olefinverbund GmbH
April 2009
Competitive Situation of the Chemical Industry
• The competitiveness of the chemical industry is dependent on its
ability to develop competitive clusters based on highly developed
logistical infrastructure
• The chemical industry in WE is defined by established pipeline
networks and the respective logistics
• The changing production pattern in the Middle East is impacting the
traditional „North-South“ focus to a more „West-East“ focus thruout
Europe
Wolfgang Schnabel
Dow Olefinverbund GmbH
April 2009
Current Situation in Central- & East Europe
• Chemical Sites in CE & EE
– Are inland chemical sites with specific requirements regarding
logistics
– Do not have a sophisticated network of connections between the
chemical sites
– Are not equipped with the logistical network to realize the growth
regarding the markets in East Europe
• A key challenge for the sites in CE & EE will be a stronger
interaction between these sites similar to the situation in WE,
where this is a reality for many decades
Wolfgang Schnabel
Dow Olefinverbund GmbH
April 2009
Pipeline Infrastructure in CE & EE
Wolfgang Schnabel
Dow Olefinverbund GmbH
April 2009
Further Challenges for the Logistics in CE & EE
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Rail Systems in West- and East-Europe not compatible
Inadequate rail- and road infrastructure
Lack of terminal structure for Inter-Modal traffic
Congested ports in the Baltic and the Black Sea
Lack of harmonization of admin and technical standards
Bureaucracy in Customs Clearance – Arbitrary Actions
Lack of harmonization of social standards (driving hours etc)
Lack of a common safety and security standard
Absence of Emergency Response and Crisis Mgmt Systems
(i.e. TUIS)
• (Non)-Availability of people with excellent logistical background
The above varies from Country to Country
Wolfgang Schnabel
Dow Olefinverbund GmbH
April 2009
Proposal to Improve Competitiveness in CE & EE
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Coordination of Pan-European infrastructure projects
Demand driven distribution of structural funds
Guarantees for Investments in East Europe
Development of a pan-European Olefins Pipeline network
Investments in Rail- and Road Infrastructure in CE & EE
Investments in Terminals for Inter-Modal Transport
Building of alternative ports for short sea transport
Harmonization of standards
Leveraging of Safety and Security Standards from West Europe
Implementation of Emergency Response and Crisis Mgmt Systems
for the Chemical Industry
• Transfer of Know How, Experience and Expertize
Solutions can only be developed and implemented in close
Cooperation between Enterprises, Logistic Providers, Politics
and Administration at Regional, National and European Level
Wolfgang Schnabel
Dow Olefinverbund GmbH
April 2009
ChemLog Contribution
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The ChemLog Project has been initiated and supported in the framework of the
High Level Group discussion
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This Interreg Project will initiate exchange of experience and cooperation to improve
framework conditions for chemical logistics in Central and Eastern Europe in the next
3 years
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ChemLog intends to produce tangible and practical results to support investment
preparation and know how transfer
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ChemLog intends to involve relevant stakeholders and decision makers from
regional, national and European Level to improve policies in favor of chemical
logistics in Central and Eastern Europe
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ChemLog will contribute to implement HLG recommendations in Chemical Regions
and intends to establish structured dialogue with European Institutions.
Wolfgang Schnabel
Dow Olefinverbund GmbH
April 2009
ChemLog Partnership
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Ministry for Economy and Labour Saxony-Anhalt
Ministry for Regional Development and Transport Saxony-Anhalt (DE)
isw Institute for Structural Policy and Economic Development (DE),
Polish Chamber of Chemical Industry (PL)
Association of the Chemical Industry Czech Republic, (CZ)
Association of Chemical and Pharmaceutical Industry of Slovak Republic
(SK)
Usti Region (CZ),
Province Novara (IT),
Logistikum Competence Centre, Linz (AT),
Regional Development Holding, Budapest (HU)
Associated Partners: European Chemical Regions Network, Chamber
Union Elbe / Oder; Voivodship Masovia, PL; Regional Development Agency
North Great Plains, HU; Ministry for Environment and Ministry for Transport
of Czech Republic, VCI Nordost
Wolfgang Schnabel
Dow Olefinverbund GmbH
April 2009
ChemLog Objectives
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Strengthening Railway and Waterway transport for chemical goods in
comparison to road to improve safety and environmental protection,
reduction of costs and increased speed and flexibility for chemical logistics
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Support of development of logistic centres for intermodal transport and their
integration in infrastructure planning.
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Support of stronger connection of pipelines for the development of an
effective central and eastern European Feedstock Network.
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Initiate transnational know-how and technology transfer for the development
of efficient transport systems with focus on West-East dimension
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Support of implementation of trans-European Transport Corridors,
Contribution for harmonisation of regulations, coordinated planning of
infrastructure and coordinated use of Structural Funds.
Wolfgang Schnabel
Dow Olefinverbund GmbH
April 2009
ChemLog Schedule
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November 2008 Start of Project
Tomorrow: Workshop on Chemical Logistics
2nd/3rd of June: 1st Dissemination Event in Prague
Publication of SWOT Analysis
• www.chemlog.info
Wolfgang Schnabel
Dow Olefinverbund GmbH
April 2009