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CIAC Supports Key Findings from Canadian Energy Research Institute Study

The Chemistry Industry Association of Canada (CIAC) is pleased to support and acknowledge several key findings in a study by the Canadian Energy Research Institute (CERI): Towards A Circular Economy of Plastic Products in Canada.

The comprehensive study, commissioned by CIAC, focuses on mapping the movement of plastic waste in different provinces by plastic-type and identifies the economic opportunities associated with recycling post-consumer plastics. The CERI study is an important step in expanding data collection to better understand where and how to apply solutions to advancing a circular economy for plastics.

“This important study reinforces the significant opportunities developing a circular economy for plastics will bring to Canada,” said Elena Mantagaris, Vice President, CIAC Plastics Division.

The study highlights the importance of increased investments in mechanical and advanced recycling infrastructure. According to the report, the positive economic impacts of additional recycling investments across Canada would add an estimated $116 million annually to GDP and $109 million in tax revenue, while creating nearly 6,500 high-paying sustainable jobs.

By continuing to develop markets in regions throughout Canada, the CERI study supports the idea that plastics should be managed as a resource, not as waste. Further investment in technology, innovation, and infrastructure could support distinct recycling hubs in key provinces. Looking beyond the CERI report, we believe this could be an opportunity to grow market share by establishing plastics recycling hubs in Canada that encompass regions throughout North America.

Read the full report here

New federal budget appropriate to current crisis circumstances, CIAC

The Chemistry Industry Association of Canada (CIAC) acknowledges the new federal budget tabled yesterday will play an important role in supporting Canadians and Canadian businesses as they continue to cope with the current unprecedented public health and economic crisis. The budget also sends important signals and provides foundational fiscal supports for the future direction of the Canadian economy as it transitions to net-zero emissions by 2050.  

CIAC has identified a number of initiatives that will bring benefits to Canada’s chemistry and plastics sectors, including: 

  • funding for Canada’s world-leading Chemicals Management Plan of $476.7 million for a further five years to “continue to protect Canadians and the environment from exposure to chemicals that can be harmful”;  
  • the development of a new tax credit for carbon capture, utilization and storage; 
  • a $7 billion commitment to the Strategic Innovation Fund including the Net Zero Accelerator fund to support projects that help decarbonize heavy industry, support clean technologies and help accelerate domestic greenhouse gas emissions reductions; 
  • investing a further $1.9 billion in the Trade Corridors Fund to spur investments to our roads, rail, and shipping routes. 

There are things that are in this budget that will help with the greening of the economy. Chemistry will be front and centre in providing those solutions to all sectors of the economywhether through green energy, electric vehicles, low carbon products, energy storage and many others,” said Bob Masterson, President and CEO of CIAC.  

While this budget establishes important signals on the direction of the future economy, post-pandemic future budgets will need to prioritize attention on strengthening Canada’s capital investment environment. Achieving Canada’s long term economic, social and environmental objectives will require major changes in recent patterns of capital investment in Canada. 

CIAC and its members look forward to supporting Canadians on the path to net zero emissions and will continue to provide solutions for decarbonizing the economy. We will also continue to work with provincial and federal governments to keep plastics in the economy and out of the environment and to innovate to enable a circular economy for plastics.  

CIAC welcomes federal government’s tabling of the new CEPA modernization legislation

The Chemistry Industry Association of Canada (CIAC) welcomes the federal government’s tabling of legislation to modernize the Canadian Environmental Protection Act, 1999 (CEPA) today. We are pleased to see a legislative recognition of the Right to a Healthy Environment in the preamble of the Act, in keeping with our U.N.recognized Responsible Care® initiative.   

CEPA 99 and the legislated risk-based approach to Canada’s Chemicals Management Plan represent the global gold standard for protecting the environment and ensuring public confidence in the chemistries essential for our everyday lives. This Bill offers a well-balanced approach to addressing identified shortcomings in the current legislation while preserving the essential, risk-based approach to the regulation of chemicals in the Canadian economy,” said Bob Masterson, President and CEO of CIAC. 

For more than 35 years, Canada’s chemistry sector has led the journey towards safe, responsible, and sustainable chemical manufacturing through its U.N.-recognized sustainability initiative, Responsible Care. Founded in Canada in 1985, Responsible Care is now practiced in 73 countries and by 96 of the 100 largest chemical producers in the world.  

Through Responsible Care, CIAC member-companies strive to “do the right thing and be seen to do the right thing.” They innovate for safer and greener products and processes, and work to continuously improve their environmental, health and safety performanceThis is why CIAC worked with leading environment NGOsin 2018 to deliver a joint statement of CEPA recommendations to the Minister. In this statement, the parties recognized the importance of environmental, societal and governance (ESG) initiatives like Responsible Care in safeguarding the right to a healthy environment. 

We share the government’s concerns about vulnerable populations; previous risk assessments have directly dealt with this issue,” said Mr. Masterson. “We support the need to maintain the science and risk-based framework for CEPA and CMP that relies on a weight-of-evidence approach to risk assessments and risk management, bolstered by precaution where appropriate. 

CIAC looks forward to continuing to work with the federal government to modernize CEPA and to ensure it preserves a science and riskbased approach. 

Q&A with BASF Canada’s new President, Apala Mukherjee

February 9, Apala Mukherjee was appointed President of BASF Canada effective March 1. She will chair BASF Canada’s Executive Committee, head its Leadership Team and lead internal business support groups, including Market and Customer Development and Sustainability.

Ms. Mukherjee has held various positions within BASF Groups including Director of Sustainability of Value Chains in Florham Park, New Jersey. CIAC had a chance to ask her some questions about her new role and what she hopes to achieve at BASF Canada.

Q: Welcome to Canada! Can you describe a bit about your previous role in the US and what led you to want to come to Canada?

A: Prior to moving to Canada, I was Director, Sustainability of Value Chains for BASF Corporation, located in Florham Park in New Jersey. Over two decades of working in this industry in various roles and regions, I have interfaced with many different industries: health and nutrition, packaging, paints, adhesives, automotive, consumer goods. In all these areas, sustainability, innovation, and digitalization are fast becoming key tenets of success. That is why I have been involved in the circular economy aspect of the business. Sustainability is something that I am very passionate about and I was very excited to be offered a position that is linked to BASF’s sustainability future goals.

I have held various leadership positions within BASF Group like heading Marketing Acrylics in Singapore and Global Business Director for Polyolefins Catalysts in the US.

Q: What do you consider to be the most pressing issues for BASF in Canada today? In the next year?

A: I have watched BASF Canada’s contribution to the overall success of BASF not only in the region but globally and over the years I have seen the company grow in sustainability and digitalization. This organization is a shining example of how we bring innovative solutions to the market. It is a very energized and modern company.

Likewise, Canada is a leader in sustainability. Canada ranks 20th in terms of the UN’s Sustainable Development Goals. Combining that with BASF’s purpose, “We create chemistry for a sustainable future,” and my strong drive towards bringing sustainable solutions to scale, when I was offered the opportunity to lead BASF Canada organization, I said the loudest “Yes!”

The Canadian Government is taking many steps to promote sustainability and providing opportunities for companies to create jobs for a low carbon future. BASF Canada, with  partnerships and initiatives like reciChain, the pilot program supporting the value-based alliance, our renewable energy partnership with Bullfrog Power is positioned to lead the change and generate value for our customers and for society. I look forward to working various partners and organizations in Canada and drive these activities forward.

Q: Can you describe your leadership style?

A:  A leader needs to be flexible and leadership style is situational. But having said that, my leadership style is built around inspiring collaboration to achieve business results. We can only do that when employees bring their best ideas forward. That only happens when employees are fully engaged, feel valued and have a sense of belonging. I am a firm believer that a leader’s primary role is to create an environment of trust, honesty, and transparency. I like to give people space and freedom. I put proper guard rails so that they can take calculated risks (and not fall off the cliff so to speak), and then learn from their experiences. I consider myself quite approachable and I try to be present and visible for employees to discuss what is on their minds, be it solutions, opportunities and/or problems. Not just my direct reports, but the entire organization.

Q: What are BASF Canada’s and your own personal goals when working with CIAC?

A: There are two very important pieces.

The first is sustainability. Plastic waste is one of the most pressing environmental challenges we are facing today. Since I led the circular economy activities in North America, I know it is not easy to tackle. BASF Canada is trying to address this through projects like reciChain, which improves track and trace and uses blockchain technology to enhance recyclability of plastics. This project has been piloted in British Columbia, but it requires effort across the industry. One of my goals is to bring integrated approach and disruptive technology to improve the industry’s efforts to reduce plastic waste and to bring it to commercial scale.

The other piece that is close to my heart is diversity and inclusion. At BASF, we believe that when we have a diverse workforce and conscious inclusion, amazing things happen. We want to be the partner of choice for customers, and we also want to be a great place for our employees to work. In my opinion, this delivers the greatest value not only to society but to our customers as well. For me, it is not an option, it is a requirement.

One of our corporate values is openness, which is why we welcome all talent and more importantly, once they are hired, we want them to feel included.  Belonging is powerful motivator for engagement. As a leader, I know we are not perfect, but we are taking a lot of steps that promote our commitment. We promote inclusiveness with various network groups: Women in BASF, LGBT and Friends, Military Veterans or the African American Employee Resources Groups, just to name a few. In Canada, we have achieved BASF’s female hiring targets, so we have increased our targets further. We are a proud participant of The Gender Equality Leadership in the Canadian Private Sector and this is something we will continue to strive for and improve on.

Q: Is there anything else you would like to tell our readers?

A: I come to BASF Canada with open eyes and ears and an openness to learn and contribute. I look forward to the myriad of opportunities to work with CIAC. CIAC has been a trusted partner for BASF Canada for many years and I would like to continue the legacy of my predecessors, with my active involvement and participation, being part of the work towards our goals of being a diverse association, solution providers and steward pioneers. I look forward to working with CIAC and its members. I ask readers to connect with us to discuss more about chemistry and sustainability related topics.

CIAC and Women Building Futures announce the John Vincett Responsible Care® Award

Women Building Futures and CIAC  are proud to announce the John Vincett Responsible Care Award.

This award was inspired by the legacy of John Philip Vincett, a prominent champion of the Responsible Care Initiative in Canada’s chemistry sector. Responsible Care requires companies to engage with communities near facilities and along transportation corridors, emergency responders, governments, and other stakeholders to advance laws and regulations supporting sustainability. This award has been created with the generous support of CIAC and will provide financial relief to Indigenous women who attend WBF programs.

On behalf of John, we are deeply honoured to acknowledge the CIAC contribution in his name to Women Building Futures (WBF). John brought integrity, thoughtfulness and commitment to all his endeavours, including his early career working with remote First Nations in Northern Ontario, and his many years working to support and expand Responsible Care. WBF is an organization that embodies John’s values and principles in its goal to empower women, and Indigenous communities through support of training and apprenticeships in the skilled trades.

  • Pam Wheaton, Toby, Sarah and Megan Vincett

CIAC recognizes Marcelo Lu for his extraordinary work supporting the chemistry industry in Canada

Today, the Chemistry Industry Association of Canada (CIAC) presented the prestigious CIAC Chair Award to Marcelo Lu, outgoing President of BASF Canada.

In presenting the award, current Chair and Chemicals Business Manager, Imperial Oil, Peter Noble recognized Mr. Lu as a “tireless promoter of CIAC, Canada’s chemistry industry and the Responsible Care® ethic that guides the industry in Canada and worldwide.”

The CIAC Chair Award recognizes Board members who have made extraordinary contributions to the work CIAC does on behalf of the industry and who are committed to living and spreading the ethic and principles of Responsible Care.

“In his role as BASF Canada President, Marcelo has gone above and beyond to raise his visibility, that of his company, this association and Canada’s chemistry industry more broadly,” said Bob Masterson, President and CEO of CIAC, at the award presentation. “He has been a thoughtful, articulate champion for BASF Canada, CIAC and the industry at large. He has never shied away from dialogue and relationship building with even the industry’s toughest critics.”

Mr. Lu served as CIAC Chair of the Board of Directors for 2018-2019. Through his years at BASF Canada, he was very active in promoting CIAC’s key policy priorities, including co-authoring op-eds, speaking at CIAC’s panel at Globe 2020 and even co-chairing a press conference on Parliament Hill with Mr. Masterson, just to name a few occasions.

“Over my years at BASF Canada, I have been proud to support CIAC in advancing the chemistry industry’s leadership in Canada and in promoting the principles and ethic of Responsible Care,” said Mr. Lu upon receiving the award. “I look forward to what the Association will achieve in the future.”

After joining BASF in 2006, Mr. Lu held various commercial and general management positions in Germany, Hong Kong, Canada and the US before becoming Managing Director of BASF Canada and then President in 2016. Prior to BASF, Mr. Lu worked for the World Bank in Washington DC.

Mr. Lu will be succeeded by Apala Mukherjee President of BASF Canada, who will assume her responsibilities for all BASF business in Canada on March 1, 2021. Mr. Lu assumed his new role as Senior Vice President, Care Chemicals North America in Florham, New Jersey, US in January 2021.

CIAC sincerely thanks Mr. Lu for his enthusiastic work promoting the chemistry sector in Canada and wishes him well in his new endeavors. We also look forward to continuing this important work with Ms. Mukherjee in the future.

A Strong End to 2020 and cautious optimism with tailwinds into 2021

Industrial chemicals outperform manufacturing in November with 1.7% growth from October  

Industrial chemical shipments rose 1.7 per cent in November on the back of a 2.8 per cent surge in shipment for resin and synthetic rubber products. This was more than enough to offset a 2.6 per cent decline in basic chemicals shipments. The final months of 2020 saw all resin and basic chemical subsectors, except for inorganic chemicals, shipments recover to near the fiveyear average 

The potential for a resurgence of COVID-19, particularly in Asia as we approach the Lunar New Year, could render the best forecasts moot. That said, Canada’s chemical sector enters 2021 with a few tailwinds behind its back. The supply chain disruptions that occurred in the spring of 2020 and the rapid rebound in demand a few months later resulted in a drawdown of inventories to multi-year lows.  

Uneven demand recovery in downstream sectors and a very active hurricane season in the US Gulf Coast have led to a staggered production and output recovery which has kept North American demand/supply balances very narrow. CIAC expects to see strong counterseasonal demand early in 2021 as companies rebuild inventories ahead of the busier spring and summer months. 

This of course does not mean the recovery is complete and chemical products that have seen their downstream markets severely impacted continue to face headwinds. Products destined for transportation end markets (fuels, de-icing, lubricants, and additives) have been volatile and with significant capacity still to return to market margins remain under pressure. But as the calendar turned to 2021 oil and gas drilling has begun to pick upFurthermore, inventory drawdowns were not limited to industrial chemicals, re-stocking is occurring across the supply chain. Additional demand is expected as COVID-19 restrictions ease into the spring and summer and more parts of the economy re-open.  

Recent reports of multi-year highs for North American export prices of basic chemical and resin products such as linear low density polyethylene (LLDPE)high-density polyethylene (HDPE)polypropylene (PP)PVCmethanolchlor-alkalibode well for improved margins in Q1 2021The American Chemistry Council noted similar trends in the 2021 Outlook released earlier this year. Early Qearnings results show integrated chemical companies estimating low to single digit growth across product lines. Automotive and aerospace segments face headwinds into 2021 with uncertain near-term demand. 

“We are cautiously optimistic heading into 2021. We are seeing some good trends in resin markets with very robust demand down the product value chain,” says Bob Masterson, President and CEO of CIAC.
“Chemistry is a global business. We need to make sure Canada is competitive when the next wave of investment decisions is made. Last year, Alberta released the Alberta Petrochemical Incentive Program (APIP), a long-term plan to attract capital investment to the chemical sector. Chemistry is a growth business and we know that if you are standing still you are getting left behind. It is critical we attract new large-scale capital investments.

“We know that for the next round of investments companies are looking at feedstock cost, turnaround time and greenhouse gas intensity. Canada has abundant and diverse low-emissions feedstock, world-class storage and transportation infrastructure and growing markets for these products. We already know that governments of all levels are looking to capture that kind of investment and we need to see it here.”

Jungbunzlauer planning new lactic acid production plant in Ontario

CIAC congratulates the leadership and staff at Jungbunzlauer Canada on the announcement of the potential to invest and build a lactic acid production facility at their existing citric acid production site in Port Colborne, Ontario.   

This project would lead to an increase in production output and workforce at the site. The company notes that special emphasis will be laid on using modern technology that ensures a minimal level of greenhouse gas emissions, water consumption and product side streams. CIAC is especially proud that Jungbunzlauer’s global leadership have recognized the competencies of the Port Colborne team and their facility to supply the Canadian and US markets. More details can be found on the Jungbunzlauer site here. Ontario can benefit with more good chemistry. 

Exports of chemical and plastic products continue to recover towards end of 2020

Chemical and plastic products continued to recover as 2020 wound to a close. Strong demand as economies re-opened in the summer and fall of 2020 brought chemical and resin inventories to their lowest levels in several years. Trade data from November shows exports of commoditized chemicals having their strongest end to a year in some time. The graphs below show the export volumes of some of Canada’s commoditized products through November.

On an aggregate level we are seeing the value of exported chemical and plastic products exceeding 2019 levels as we ended 2020. The American Chemical Council is a seeing similar trends to start the year.

Significant differences underlie these aggregate trends. Products whose downstream sectors remain deeply impacted by COVID-19 (auto manufacturing, oil and gas drilling, paper product manufacturing, and travel, as examples) or those continuing to face overcapacity or logistical pressures are further back in the recovery. Plastic Product manufacturers were severely impacted in the spring of 2020 by lockdown restrictions but since then, exports have reach multi-year highs. Strong demand from nearly all sub-sectors have been seen in the fall with auto parts and construction materials showing some counter seasonal trends this year.

Looking ahead

A crucial trend for 2021 will be further price strengthening accompany the strong demand. A large share of the gains seen in the graphs above are from volumetric gains. Margins remain compressed across a wide variety of chemical products. During third-quarter earnings calls in October 2020, several CEOs expected global chemical demand to remain tight through early 2021 with the normally slower winter months used to rebuild inventories and hopefully providing a boost to prices and seasonal demand normalizes in the Spring of 2021.

 

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