Bahrain-based Gulf Petrochemical Industries Company (GPIC) hopes to chart its course safely through the current volatile market and economic uncertainty by remaining competitive and sustainable through strong growth strategies and implementing a clear and tangible 2030 corporate strategic plan.

Driven by turbulent market conditions, low oil prices, and escalating natural gas and electricity prices in the current year, the company says it is on track to overcome the general economic slump with its relentless and driven attitude to sustainability, corporate social responsibility (CSR) and beyond excellence results. 

“Although 2016 has indeed been a challenging year for every industry and sector, and GPIC has not been immune to the impact of these external forces, the company, through adopting bold production targets, optimising production and ensuring a dynamic focus on operational excellence, will prevail through the general slump in the economy,” said GPIC president Dr Abdulrahman Jawahery in an exclusive interview with Gulf Industry.

Production success

Continuing to build on its success, GPIC in this past quarter of the current year, produced its highest-ever amounts of ammonia, urea and methanol and the company’s exports since the beginning of the year reached 888,000 tonnes by the end of the third quarter.

GPIC’s total production capacity sits at 1.6 million tonnes (mt), with roughly 40 per cent being urea, followed by ammonia and methanol around the same capacity percentage.

“Our output capacity for 2016 as it stands, reflects just over 700,000 million tonnes for urea and also a slight increase on last year’s figures for ammonia and methanol,” he said.

In 2015, GPIC’s urea production reached 645,475 mt, followed by ammonia at 415,688 mt and methanol at 404,478 mt respectively.

“In 2015, we initiated our planned and major plant turnaround which lasted just less than a month and highlights the difference in production output for our products between 2015 and 2016,” he added. 

On the exports front, the company said its exports by the end of the third quarter reached 888,000 tonnes, with Brazil taking a major chunk of close to 30 per cent of the total production.

Jawahery: GPIC has not been immune to the impact of external forces

“Markets have shifted over the course of the year and the company is seeing new emerging opportunities and customers coming to the fore from a number of key regions around the globe,” said Jawahery. 

Brazil, India, China and countries in East Asia have delivered sound and growing trends in imports for GPIC’s products, whilst more traditional markets have witnessed an internal consolidation of their imports in general, resulting in a shift in market purchasing patterns.

“The company’s production success in this past quarter is down to its exceptional operational excellence standards and all of its employees who have a relentless pursuit and commitment to optimum professionalism in spite of an unstable global market and low oil prices,” he added.

ADDING VALUE

The mantra behind GPIC’s production success this year is its Integral Forward Focus approach.

“GPIC is constantly looking to add value to the market and to all of its shareholders and stakeholders alike.  The company firmly adopts, what we term, Integral-Forward-Focus, which means we manage our operations, our plants and our strategy pre-emptively,” said Jawahery.

“Preemptive moves exist all along the value chain and it’s about capturing those opportunities and/or cornering aspects such as raw materials and components to position one’s product offering in a unique way,” he added.

As part of this overarching strategy, GPIC has also adopted a number of step changes to increase the production capacity of its plants whilst at the same time never compromising on its quality, efficiency and internationally recognised health and safety standards. 

Some examples of these step changes and ongoing capacity expansion initiatives include the construction of its CO2 recovery unit, one of the first in the region which has aided in increasing its urea plant capacity by 8 per cent and methanol plant capacity by 12 per cent.

The company has also continued to modify, enhance and/or replace major equipment in a very proactive way during its planned turnarounds which take place every two years and have resulted in year-on-year margin capacity increase. 

“Looking to the future we are focusing on a number of prospects that align with our brand proposition, our 2030 Corporate Strategy and our strong partnership and relationship with our shareholders,” he said.

OPTIMISING COSTS

At the same time, GPIC has focused on optimising production costs; enhance resource efficiency and improve employee productivity. Towards that the company has during the course of 2016 consolidated and prioritised its Capex investment accordingly.

“GPIC, generally, budgets around BD15 million ($40 million) each year to undertake its short-term and long-term Capex Projects.  Of course, volatile markets and global economic instability have resulted in all companies across every sector and every industry, consolidating their costs. GPIC is by no means immune to these factors either, and has during the course of 2016 consolidated and prioritised its Capex investment accordingly,” Jawahery said.

“We have undertaken a number of Reliability Capex projects throughout our plants such as the refining of our Urea Reactor, upgrading field instrumentation and replacing key control valves,” he added. 

“Each and every year we undertake substantial investment in the sustainability of our business and our operations. In fact, GPIC does not relate its Capex investment to the revenue it generates. Instead, revenue generation is for us, a by-product of our company’s sustainability strategy in terms of the three pillars – People, Planet and Profits.

“GPIC rather continuously seeks ways to improve, enhance and ensure its viability each year on the basis of what it believes it should invest in for the future. Again, this Integral-Forward-Focus approach is what drives our Capex investments.

“Our four key categories of investment in terms of Capex are: safety, health and environment; reliability; information technology and, administration. We have a number of short-term and long-term Capex projects within each of these categories and also, every turnaround we plan, involves independent inspectors and Insurance Surveyors who give guidance on areas of our plant operations we could seek to improve in the future,” he added.  

According to him, the company also undertook a series of targeted cost optimisation projects initiated by every department across the organisation. This resulted in further enhancements to processes, systems and cost effective operational practices.

“The company has always sought operational excellence and business stewardship, which by its very nature, focuses the company and all of its employees on implementing the most effective and most cost-efficient process or business practice,” he said. 

ACHIEVEMENTS IN HSE

Referring to the company’s achievements in occupational health, safety and environment (HSE), staff training and community partnership, Jawahery said: “GPIC achieved well over 22 million accident-free man-hours in 2015 and in 2016 so far, it has reached over 24.5 million accident free hours.

“This achievement is down to the highest levels of value we place on the care and well-being of both our employees and our contractors alike. Our Board of Directors and GPIC’s executive management team have always sought to engender a culture of safety among our employees and throughout all business practices and processes,”’ Dr Jawahery- explained.  

GPIC’s leadership commitment to HSE is built on a genuine belief in the “triple bottom-line” business concept, where profitability and creating shareholder value is equal to the company’s social responsibilities and commitment to health, safety and protection of the environment.  The company’s HSE achievements continue to shape the industry’s standards in the region and globally; to highlight a few:-

The highest standards in safety training continues to be provided  each year in GPIC to both operational and non-operational personnel and the company also focuses strongly on the training of contractors to the same standards through the development of its unique state of the art training programme called IMIST (The international Minimum Industry Safety Training).

Furthermore, integrated SHE and environmental audits are continuously carried out throughout the year and GPIC has furthered its corporate social responsibility (CSR) through the continued teaching and lectures it conducts in schools, universities and on behalf of the Ministry of Education, the total number of students benefiting from this programme has crossed 27,500 since 2001.  

Again, throughout 2016 GPIC has invested extensively into building the capabilities of the Kingdom’s future generations through its various educational programmes and partnerships. As a result, GPIC was recognised this year with two top Arabia CSR Awards within the large industry category as well as the partnership and collaboration category.

“GPIC has a strong governance culture which is designed to ensure a sustainable approach to its business operations and to all of its stakeholders. The company’s values and focused vision underpins its strong track record of success and achievements over its many years of operation,” Jawahery concluded.