Raman Ramachandran, Chairman and MD, BASF India & head, BASF South Asia, on elements that are changing the face of the company
BASF TURNED 150 THIS YEAR AND DECIDED TO celebrate this poignant journey with a twist. Instead of just making merry they looked upon the milestone as a unique opportunity to study some of the challenges that are present in the world and find ways to address it. “The idea is to celebrate not only with our employees and customers but also by connecting people and ideas around the globe,” said Raman Ramachandran, chairman and MD, BASF India and head, BASF South Asia. Under his able leadership, the company hosted the first part of global celebrations called ‘Creator Space’, a mobile pavilion concept. Ramachandran elucidated, “This programme focuses on three main issues of urban living, energy and food.
The Creator Space event kick started in Mumbai and sought to address the topic of water. The initiative brought together all the stakeholders who are concerned about or related with water in Mumbai.” What I found really interesting was the varied programs that were organised to raise awareness during the course of seven days. Along with a summit they had jamming and painting sessions where around 100 schools participated in the painting competition. There was also a movie competition where students put together movies on water challenges in Mumbai. “We also brought in a diverse range of stakeholders to look at solid waste management practices that can be put into place. Industries too came forward to talk on topics like water management, waste water at the industry level, etc. On the whole the event really lived up to its name by trying to find solutions to hardcore problems in a creative manner,” asserted Ramachandran.
“We believe that educating the next generation at an early age is crucial in shaping the future of the chemical industry.”
THE ROLE OF chemistry has indeed changed over the years and who better a witness to tell us how than Ramachandran who has been associated with BASF since the past 15 years. “In current times, it is undoubtedly the digital revolution that has been a key technology change and has impacted the way business is done. From a manufacturing perspective, automation has been a recent trend even in the chemical industry.”
Chemistry and innovations go hand in hand and it is not easy to come up with path breaking solutions frequently. Agreeing, Ramachandran added, “I guess the question is more about how we create an environment where innovation thrives and people are willing to take more risks. One of the fundamental competencies expected from the leaders and employees at BASF is to be able to take entrepreneurial decisions. Any entrepreneurial decision goes with some risks and as an organisation one cannot talk about encouraging people to take decisions if they are not ready to accept mistakes.”
Such a favourable environment has obviously resulted in plenty of pioneering products. “We are big players in the agro chemicals area and there have been innovations which are primarily in the volume of product or active ingredients that goes on the crops. Over the last 30-40 years, the amount of chemical that is applied has reduced from kilograms of active ingredients per hectare to grams. These chemicals also meet the increasingly stringent regulatory requirements in the area of environmental impact, non-target impact and health effects. The formulation and application technologies are a completely different ball game and there has been tremendous progress, particularly in the Asia-Pacific region,” Ramachandran mentioned.
Further innovations have been seen in designing plants which have the flexibility to use different feedstock providing significant competitive advantage. “There have also been innovations in the area of catalysts and environment protection particularly in Volatile Organic Compounds (VOCs) both in emission control from plants and also in terms of production technologies. Today, solvent based technologies are being replaced by water based and this is an exciting phenomenon,” said Ramachandran.
TO CREATE AWARENESS of the importance of chemistry and how it affects our daily lives, BASF has created an interesting programme. BASF Kids’ Lab was introduced to impress on young minds, aged 1315, how our daily lives can flourish by simple chemistry. So far, BASF Kids’ Lab has been attended by more than 50,000 kids across India.
Explaining the concept, Ramachandran averred, “It is an initiative through which we try and create greater interest in children for chemistry by actually making them do very simple chemical experiments. For example, a water purification experiment which clarifies dirty water. Though simple, it helps children understand the use of chemicals to do this. We believe that educating the next generation at an early age is crucial in shaping the future of the industry.” BASF has become an integral part of India’s chemical industry with its diverse portfolio of innovative products and solutions. With the exception of oil and gas, all BASF divisions operational globally like chemicals, performance products, functional solutions, agricultural solutions, are active in India too.
“A lot of our portfolio is global but that does not mean that we do not have solutions tailored for the Indian market,” professed Ramachandran. “We have an initiative called ‘Bottom of the Pyramid’ where we try and look for solutions that will have a market in the emerging middle class parts of the society. It goes back to the concept of trying to understand what the customer needs and then being able to make the product.” He stated the example of slum clearance projects to substantiate his point. Today, with the need to rapidly erect buildings, the company found that one of their high end products in the construction chemicals known as Smart Dynamic Concrete (SDC), which is actually used in high-end construction, really helps in these projects because it makes the process very efficient.
Verbund is all about intelligent interlinking of production plants, energy flows and infrastructure.
“Due to the unique characteristics of the RheoMATRIXTM molecules, present in the concrete, mixdesigns can now be optimised to achieve unmatched performance levels and offer benefits to multiple stakeholders in the construction value chain. This is an apt example of how we are able to take some of our technologies and apply it in the ‘Bottom of the Pyramid’.
BASF runs on the philosophy of globalisation of R&D. Their intention is to have 50% of resources and money spent on research by 2020 outside of Europe. Of that 25% will be spent in the Asia-Pacific region. The company has already started progressing on this path by investing approximately €50 million via BASF Chemicals India on a new Innovation Campus in Mumbai. The campus, operational from 2017 will play host to 300 scientists and will include synthesis, application, process and analytical laboratories.
“The Innovation Campus will bring the best international scientists from India and other parts of the world together into the global R&D Verbund and will be a key hub of the global R&D network. Also, next to Shanghai, this would be our second major R&D location in Asia Pacific,” stated Ramachandran. Apart from this, the company already has existing R&D facilities at Chandivali in Mumbai and the Mangalore site. There are also application labs in the areas of textile and leather. “These application labs are trying to help customers solve their problems. One can also think of them as the bridge between research and bringing the product into the market,” affirmed Ramachandran.
ONE THING THAT BASF has always been very well known for is the concept of Verbund (a German word) manufacturing. “It essentially means that the manufacturing is done in such a way that the output from one plant becomes the input for another. We use very efficiently almost everything that goes into a large manufacturing environment for producing products. We have very specific Verbund sites in China, USA and Malaysia and the largest one is at our headquarters at Ludwigshafen,” avowed Ramachandran. With its six Verbund sites and 353 additional production sites, BASF supports customers and partners in almost every country in the world. “The Verbund system creates efficient value chains that extend from basic chemicals right through to high-value-added products such as coatings and crop protection agents. In this system, chemical processes consume less energy, produce higher product yields and conserve resources. In that manner, we save on raw materials and energy, minimise emissions, cut logistics costs and exploit synergies. These solutions enable us to sustain competitiveness in every world region while making our customers more successful,” opined Ramachandran.
Also helping them to compete is their focus on going green. Being a chemical company it is quite fascinating that they focus highly on sustainability. “For us, this whole aspect of manufacturing responsibly with environment protection at the same time is almost like a table stake. We in fact combine not only environment protection but also social responsibility. Our sustainability position focuses on responsible production, use, transportation and social responsibility,” admitted Ramachandran.
BASF has invested approximately €50 million via BASF chemicals India on a new innovation campus in Mumbai.
The stated purpose of BASF is to create chemistry for a sustainable future. According to him, by 2050 we will have nine billion people living on this earth and “if we continue to consume, manufacture, live the way we do today, we will end up having resources of more than two to two and a half earths. We obviously cannot afford to have that. It’s just not there. This is where we believe chemistry will be a big enabler in coming up with solutions that will help us live sustainably with the resources that are available on this earth. This also addresses our approach to R&D.”
By focussing extensively on energy, climate change and urban living the company seeks to address the needs that will allow one to live sustainably in the future. “Within that, environment protection is a very important topic, particularly because we have a large manufacturing footprint across the world. By 2020 the aim is to reduce our gas emissions by 70% and improve energy efficiency by 25%. We will also reduce potable water use in our manufacturing sites by 50%. These are all stated goals and every year we actually publish a global report which tells all our stakeholders what we have achieved against those goals and the kind of progress we are making.”He further added, “We are constantly striving for newer ways to address some of the challenges in the manufacturing environment. Even in India, for example, at our Mangalore plant, we run our boilers through a bio-boiler energy source.”
LIKE THERE ARE two sides to a coin there are also hurdles that the company encounters. One such lies in feedstock availability for speciality chemicals. “Most of the feedstock is used for captive purposes. As a result, for most specialty chemicals, India remains an import market. With the Make in India initiative the focus should be to manufacture in India for India in the first term. Since the cost of setting up feedstock plants is quite high, I believe, the government should provide incentives to companies and help them out. This would then help reduce the dependency on imports.”
Thane: Manufactures engineering plastics, coolants, polyurethanes, textile & leather auxiliaries, care chemicals and construction chemicals.
Mangalore: Dyes, polymer dispersions, coatings and construction chemicals. First manufacturing operation for fine chemical catalysts in Asia Pacific since 2013.
Ankleshwar: Dispersions and pigments and paper chemicals.
Chennai: Automotive Catalysts Groundbreaking of new production site with expanded capacity for mobile emission catalysts in Mahindra World City in December 2013;startup planned for 2015.
BASF sites in Turbhe, Bangalore, Nalagarh, Nellore and Kolkata: Construction Chemicals systems and formulations.
Dahej: An integrated hub for polyurethanes manufacturing also houses production facilities for care chemicals and polymer dispersions for the coatings and paper businesses. Completed more than 12 million safe work hours during the construction of the project with zero loss time injuries.
Such challenges are a part of growth and BASF has defined its growth strategy clearly. “We have announced a strategy called ‘grow smartly’, which states that we will double our sales in the Asia Pacific region by 2020 from about 10-12 billion to 25 billion. Within this strategy we have a very clear intent that 75% of all that would be sold in the Asia Pacific region, would also be produced in that region, which would then require fairly substantial amount of investment into manufacturing,” averred Ramachandran.
The number of investments in India substantiates this claim to quite an extent. “We had our single biggest investment of about Rs 1,000 crores in Dahej. Another plant in Chennai, which when it comes onstream, will provide emission control devices for heavy vehicles, motorcycles, and cars. The innovation campus too is a huge investment. It is also imperative to mention that the principles, environmental standards, process safety standards followed here in India are the same as the ones followed globally and India forms an extremely important part of BASF’s strategy globally,” declared Ramachandran.