Engauge: Case study competition on Sustainability, EHS & Green Marketing

Marketing strategy for introducing Green surfactants/ Ingredients for FMCG Firms by a speciality chemicals company
The Chemical company (existing turnover Rs. 300 Cr.) is engaged in manufacture & sales of chemical ingredients (surfactants-sulphates, amines, ethoxylates , esters etc) used by end user Industries such as Home & personal care , Textile auxiliary manufacturers ,Paint, Pharmaceuticals, agrochemicals etc. The Chemical Company is based out of India with almost 50% revenue from exports. The Customers include global firms which manufacture shampoo, detergents, emulsion paints, fabric softeners, agrochemicals etc. Most of these customer industries use & make products which are made from organic chemicals & mixed with water. To mix the organic & inorganic phases, one requires Surfactant .These surfactants are made from petroleum raw materials as well as vegetable oil based raw materials. Also some surfactants have sulphates; the trend is towards non sulphate surfactants as sulphates are supposed add pressure on biodegradability of surfactants. There could be some surfactants which consume more water to give same effects such as cleansing, emulsification etc. saving water usage or use of cold water than warm water could also be termed as green Now The Chemical Company wants to launch products made from sugar, castor oil, palm oil rapeseed oil etc. Suggest the strategy for introducing these green ingredients in the market. List of Point of views or debatable issues to be considered while suggesting the strategy-The list is suggestive & not exhaustive. 1) Relative Cost of products from non-renewable (non-green) & products made from renewable sources (green) (Typical analogy Prohibitive cost of Solar power against cost of coal based power) 2) Cannibalization of existing product range which is non-green by the proposed, to be launched, green product range 3) How to prove the greenness of the products?

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4) Some of the renewable raw materials used to make the green Surfactant product range are also used for edible applications there by creating debate on whether one should divert the feedstock to non-edible application from edible applications. 5) Developed markets such as Japan, Europe & USA have more acceptability for green products but there are already existing chemical firms which have already started selling green products. However, market growth rate in these developed countries has slowed down. Is there a possibility to make green surfactants affordable & advantageous enough to be marketed in India /Asia/Africa & Latin America which are growing markets? Should the Indian firm focus on export markets or domestic markets?

Guidelines for final output to be submitted as part of case study.

The participants can do a deep dive & select an Industry (as focusing on all- agro/textile/personal/paint industry cannot be done in a short span of time) such as Personal care face-wash/handwash/shampoo/detergents select some products & then suggest a strategy The participants can give this background, followed by strategic inputs & how the strategy could be implemented. They can also give some live examples of chemical firms who have already done this or doing this today. It will be good to focus on limited & key - 3 to 5 strategic directions (not more than that) so that the strategy takes the company to some unique position compared to competitors. The entire case study (Write-up) should not exceed 15 pages (pdf format). The case study should have proper links/references as annexures etc. It should also have a crisp ppt. (Maximum 20 slides excluding Introduction and Concluding slide) which can be presented in 20 minutes. The participants should follow all the copy right rules & regulations & should not infringe on anybodys Intellectual property. Some articles are attached as reading material to stimulate thinking.

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Supporting Articles

Rakesh Rao | Mumbai

FMCG companies banking on specialty chemicals to achieve sustainability

Many FMCG companies have announced ambitious sustainability plans to reduce their carbon footprint and save environment. Specialty chemicals, with their unique properties, are helping these companies realise their green goals. Everybody is familiar with Shahrukh Khan featuring 'No VOC No Gadbad' ad of Nerolac paints educating the consumers about the side effects of VOC (volatile organic component) in paints. This is one of many such examples wherein consumer product manufacturers are redrawing their marketing plans with emphasise on the eco-friendly theme. FMCG companies are living no stone unturned in their quest to reduce carbon footprint in their supply chain. It is here that specialty chemicals play a big role. Be it fabrics that requires less water to wash, powered shampoo, or paints with low VOC, etc all require new processes and raw material (ie, specialty chemicals) which can be help these companies achieve their sustainability goals. Growing awareness about the environment has made consumers conscious about importance of ecofriendly products and they are ready to pay the premium. As a result, product manufacturers are incorporating changes to suit the consumer demand. Today, the customer awareness on health consciousness and eco-friendly products has gone up. Manufacturing companies are looking at specialty chemical additives that help in improving the functionality of the product as well as reduce the environmental load either by achieving the same end product in minimum number of steps or consuming less amount of chemicals than before, says K Jayaraman, Executive Director (Operations Consulting), PwC in India. ALSO READ: Is Indian chemical industry ready for green march? Understanding the customers demand, chemical companies are developing products that meet their requirements. At Dow Corning, sustainability is an essential fibre of our future success. It helps us meet the needs of our customers, emp loyees and communities around the world. Thats why sustainability is one of our corporate values and part of our vision. We help our customers in achieving their sustainability goals by innovating products and services, said Diane Kelly, Regional Preside nt for Dow Corning India/ASEAN/ANZ.

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Bio-based ingredients in demand

PwC's K Jayaraman Demand for natural ingredients (especially in food and personal care products) is growing, driving FMCG companies to source bio-based specialty chemicals. This allows companies to reduce their environment footprint and emerge as green producers thanks to specialty chemicals. In that way speciality chemicals have a very large or if I may say one of the most significant role for companies across industries to move towards and achieve their sustainable goals. They act as additives, accelerators, catalysts in various products and processes thus helping to achieve more with less. They enhance performance and reduce consumption of scarce resources. Some of the companies are looking at biomass route with specialty additives to develop products, added Jayaraman. For example, DuPont Tate & Lyle Bio Products (DuPont Tate & Lyle), a joint venture between DuPont and agrobusiness firm Tate & Lyle, has partnered with preservatives and personal-care ingredient maker RML (Sandy Hook, CT) to create a new line of alternative preservatives using DuPont Tate & Lyle's Zemea propanediol. Zemea is a 100% percent bio-based ingredient for use in the cosmetics and personalcare market. According to Jayaraman, Clariants industry standard -setting innovation EasyWhite Tan provides an environmentally compatible, safe and simplified tanning process that will have major benefits for tanners supplying almost every sector, from automotive leather to footwear. This technology has been developed using Clariants Granofin Easy F-90 Liquid, an organic compound that is not based on chrome, phenols or aldehydes. It removes the need to add salt during the tanning process as well as reducing the number of stages in the tanning process itself. In the Indian context, recent Eco Clean paint from Kansei Nerolac Paints odourless paint with no VOC is another example where products are developed with special additives for changing customer needs, he said. Following the mega trends

Dow Corning India's Diane Kelly Specialty chemical makers are undertaking product innovations that address global challenges (megatrends associated with energy consumption, the environmental impact of global warming, the challenges of urbanisation to health, safety and quality of life, etc). The company believes that, by paying attention to and focusing on world-scale challenges that influence the quality of life, it would be able to deliver

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innovative products and solutions that can create economic and social value, as well as help our customers to achieve sustainability goals. By helping customers invent the future today, we ensure a better tomorrow for people everywhere, added Kelly. Green building or energy efficient electronic products, chemicals that add sustainability in their functionality are in demand. For example, more and more buildings are built using adhesives instead of metal bolts & nuts. In construction, our silicon technologies play an important role in green building, including sealants and adhesives used in engineering, building and coatings; vacuum insulated panelling; glass insulation; weather-sealants; and window and door manufacturing. Silicones last longer and need to be replaced less often than many organic materials, which reduces lifetime costs and contributes to sustainability, claimed Kelly. ALSO READ: Responsible chemistry is formulae for a greener tomorrow: Vipul Shah, Dow India Silicones are play key role in the development of technologies for solar energy production, thus helping make renewable energy economically competitive with traditional energy sources. Silicon technologies play an important role in greener transportation, for example, tyre additives that increase gas efficiency without sacrificing safety. Silica-reinforced green tyres can reduce rolling resistance up to 20%, reducing fuel requirements by as much as 5%, stated Kelly. Recognising green efforts FMCG companies are aiming to foster better relation with their suppliers for adopting green processes right up to the final link in their supply chain network. These companies are also recognising the contribution of suppliers of chemicals by honouring them with green awards. For example, in July 2013, Tata Chemicals was felicitated with the prestigious Unilevers Partner to Win Aw ard for Winning Sustainability in recognition of its effort in aiding Unilever to significantly reduce the environmental impact of laundry powders and their business association to create traceability for mined chemicals. So is sustainable or eco -friendly chemical an effective marketing tool for special chemical manufacturers to sell their products to end-user industries? Jayaraman commented, Considering the changing need of the customers, those parameters will no more become Order Winners but will become the Order Qualifiers of the future

Second Article

Is Indian chemical industry ready for green march?

Who's who of the industry expresses their views on eco-friendly initiatives to be taken by India for sustainable growth.

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The Indian chemical industry, currently valued at $ 108 billion, has been growing at a robust rate. With manufacturing landscape shifting to Asia, India, which currently accounts for only 3% share of the global chemical market, has the potential to emerge as one of the major destinations for chemical companies worldwide. But for this to happen, industry will have to improve efficiency and adhere to global environment & quality norms. Sustainable development is critical to foster the growth of the Indian chemical industry. It forms the central foundation for responsible corporate governance, said Vipul Shah, Chairman, CEO & President, Dow Chemical International Pvt Ltd. He added, Being an energy intensive industry, which touches various aspects of human life every day, the Indian chemical industry needs global, uniform standards in environmental administration. For maximum impact, sustainability must be central to the company strategy, engrained in the culture and embedded in the reward structure. The organisation should be cognisant of where the barriers are to delivering on the goals and where the strengths are to build on. On a green route

Dow India's Vipul Shah Economic growth has been focal point of the policy makers for overall development of the country. While this is true, there has been an increased need to do it in an environmentally benign way. Balancing ecology with economy is the way forward to ensure sustainable development. Globally, the chemical industry has been one of the early adopters of eco-friendly processing by investing in green technologies. R Mukundan, Managing Director, Tata Chemicals Ltd, said, From being limited to corporate philanthropy, sustainability now is firmly embedded into all the business areas and is one of the important strategic parameters for any business decision. Given the universe we operate in, it becomes imperative that we incorporate processes that are sustainable. The Five Year Plan document (2012-2017) for the chemical industry stresses on sustainability particularly resource and environment sustainability. Water, environmental impact, raw materials, safety over lifecycle and energy use are some of the issues grappling the industry. Indian chemical companies will have to invest in innovative solutions to find appropriate answers to these challenges.

BASF India's Prasad Chandran

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Prasad Chandran, Chairman, BASF Companies in India & Head South Asia, believes that the motivation for sustainability has changed over the years. Shareholders demand enhanced value for their investments, consumers want better quality products, employees need conducive work-culture and the society supports industrialisation that is in harmony with the environment. The common thread that links them all is sustainability. And, this I believe is a companys License to Operate. Moreso, for the chemical industry as it is perceived to be an enabling industry. It offers innovations and technological improvements, which aid the growth of almost every industry today, in a profit able and sustained manner, he added. Fuelling demand As per the National Manufacturing Policy, the government aims to increase the share of manufacturing in GDP to at least 25% by 2025 (from current 16%). To achieve this ambitious objective, the Indian chemical industry will have to play a catalytic role.

Lanxess India's Dr Joerg Strassburger The National Chemical Policy (NCP), which is currently under preparation, stresses on the importance of research and development, safety, sustainability and green chemicals. Sustainable development - one of the mainstays of the policy - focuses on four key areas - health, safety, quality and environment. Dr Joerg Strassburger, Managing Director and Country Representative, LANXESS India, Sustainability is crucial in todays business as well as for the future and is no longer obligatory or necessary only from a compliance point of view. It is noticeable that the consumer is increasingly placing higher importance on health, safety and environmental protection. This clearly emphasises the need to build a business model centered around sustainability.

India to emerge one of the major powerhouses in future, it will have to optimally use the resources at hand without having adverse effect on the environment. In such circumstances, companies will be answerable not just to the Board of Directors, but also to society. Reducing carbon footprint in the supply chain will also be important mandate for the chemical manufacturers.

Tata Chemicals' R Mukundan Dr Strassburger said, Companies in the chemical industry need to be even more cautious and must behave responsibly towards the people and environment because in India, the industry has a negative image in this regard. Every stage of the business right from procurement, production, storage, distribution to disposal

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needs to be monitored, analysed and audited for further improvement. This can be in terms of reducing carbon footprint, reducing energy consumption, conserving natural resources like water and minimising effluents and wastes that are discharged. For achieving this, investment in technology and focus on innovation is key. Companies could also subscribe to global initiatives like Responsible Care (led by Indian Chemical Council) to improve their safety, health and env ironmental (SHE) aspects on an ongoing basis. Taking full responsibility While there is an agreement in the Indian chemicals industry that manufacturers should act responsibly, experts feel that there is the need to differentiate such responsible companies through Responsible Care certification. The government should frame policies to incentivise companies, who are complying and acting responsibly, and not treat them at par with those who do not. With sustainability as one of the focus areas of the National Chemical Policy, it will encourage companies to seek Responsible Care certification. Mukundan said, Within the chemical industry, the Responsible Care Initiative is a huge step forward in the campaign to make sustainability as part of companies business decision. The Responsible Care initiative acts as an enabler for continuous improvement in SHE performance, together with open and transparent communication with stakeholders. The role of top management is vital in ensuring chemical industry appreciates people, planet and profit through same lenses across the supply chain. This will also aid in making the industry more organised, responsive and inclusive. Chemicals, the growth enablers Regulatory developments in the end-user industries are also leading to adoption of green initiatives in the Indian chemical industry. K Jayaraman, Executive Director (Operations Consulting), PwC, India, said, Today, the customer awareness on health consciousness and eco -friendly products has gone up. Manufacturing companies are looking at specialty chemical additives that help in improving the functionality of the product as well as reduce the environmental load either by achieving the same end product in minimum number of steps or consuming lesser amount of chemicals than before. In recent times, companies across the industries (such as textiles, home & personal care, etc) are setting up their sustainability goals. In such circumstances, specialty chemicals can play an active role in helping them to achieve their sustainability goals. Diane Kelly, Regional President for Dow Corning India/ASEAN/ANZ, said, Sustainability is about more than just being green on the surface. It is also about ensuring innovative solutions are durable over the long term bringing huge commercial gains to customers, as well as affordability to their end consumers. Indian chemical industry has begun the journey on the green path and will have to pursue it with innovative solutions in future as well to emerge winner on the global map.

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