Friday, 13 November 2009

Dow Corning

I was invited to visit the Dow Corning site in Barry on 13th November, the leading global supplier of silicone, to meet Peter Cartwright, the Executive Director of Environment, Health and Safety for the group internationally, and Dave Ott, the Barry site manager.

It’s the company’s largest and most technologically advanced site in Europe, employing around 600 people locally.

You may wonder what business I would have with a silicone supplier? Firstly the importance of silicone production should not be underestimated. They are used to manufacture basic everyday products in numerous fields from household goods, sealants, glues, medical products and sustainable technologies such as solar technology.

The site has grown rapidly over the last quarter of a century and has become a well known feature on the Bristol channel.

Like other heavy industries the cost of energy in the UK is creating challenges for the company. The process relies on steam power, which in itself is best forged by burning fuels rather than via the generation of electricity, then converted to heat. Thus energy sources which may appear more environmentally sustainable are not necessarily liable for use or the most efficient ways to support high productivity. The site uses natural gas, which they generate using their own on site power station. The natural gas burned must be imported and thus brings with it the tax of carbon credits. Energy and production costs far outweigh labour costs, but the impact of high energy prices in the UK drives many companies to move to industrial nations with more lenient restrictions and lower costs. We have already sent the effect the inability to broker affordable energy deals can have on industry in the UK through the closure of Anglesey Aluminium to the tune of some 540 jobs. The supply of energy and relative cost is the biggest obstacle for long term durability.

I asked them what they thought would be the best possible solution to the energy problem. They seem to be heavily embroiled in significant R&D investigating just this, alongside finding ways to channel efficiency, reduce by-products and commit as much waste as possible to recycling. It seemed to me that they were in support of Nuclear Power, something, I too, applaud.

Chemical engineering sites are large consumers of energy. However, for every tonne of carbon emissions, an equivalent two to four tonnes is saved by the function of the various products they manufacture. Ironically one of the highest consumers of energy through production is the manufacture of solar panels.

We discussed various alternatives for reducing costs, saving energy and maintaining a solid and loyal workforce and good community links in the area. We talked about the concept of anaerobic digestion as a manner of making biogas to burn, an idea WAG occasionally mull over. The UK is fast running out of natural gas. A lot of gas used here is shipped from overseas. The problem is these tankers can easily be diverted to the highest bidder and as supplies continue to tumble, the cost of guaranteeing an energy source is climbing steeply. It is not unknown for a tanker destined for your site to be diverted to a late bidder elsewhere in the world.

Couple this with extensive measures regarding climate change, environmental protection, competition laws, working rights, costs, liability and you begin to see the thorny regulatory landscape in which heavy industry resides. Harmonisation was a word used by the site manager, an American Dave Ott, to suggest what was needed to make the legislative minefield a far kinder habitat. As a global company, Dow Corning is at the mercy of various legislative giants. The Barry site alone must function within the remit of WAG, Westminster and of course Europe. REACH compliance, (Regulation, Evaluation and Authorisation of Chemicals) is also costly and the economic environment remains difficult for these big spenders. REACH will cost Dow Corning something in the region of $100 million over ten years To help lighten the burden the industry would welcome legislative changes, such as phased payment of fees to the European Chemicals Agency and low interest loans or tax credits to cover compliance costs. However the company also admits that internationally there perhaps has not been enough regulation until now. The key for the future is synthesising regulations to make the most cost effective and workable system for companies such as Dow Corning. In fact, the company are setting up a plant in China based on the site in Barry. The Chinese Government have welcomed the development and the high standard of regulations to which Dow Corning are adherent and are looking into adopting similar provisions for their domestic sites.

The European Silicon industry has established a regulatory consortium, CES, The Centre European des Silicones, which is also a sector group of the European Chemical Industry. The group have been lobbying to protect big industries in the wake of necessary legislation on climate change and development in the face of ever increasing productivity. Whilst environmental provisions are of course costly to implement, the company predicts the net outcome will eventually tip in their favour. By employing stringent energy saving measures, costs are eventually cut and efficiency increased, offering long term financial benefits.

So I am sure you can see a bit better why Politicians work alongside these big employers and producers. Not only do they employ large swathes of the local workforce and must be protected for this reason, they are the future of technological development and key features in our communities.

I thoroughly enjoyed the visit, being driven around the site and seeing in action the ingenious interlinked resourceful technologies employed to drive energy efficiency. Dow Corning revealed to me they would be meeting with other global manufacturers over the coming months from diverse sectors to discuss finding a likely recipient of their by-product, a dusty compound of waste silicon metal, perhaps in car manufacturing, cement mixing or even making household products. Already they exchange products and by products with the site next door, establishing an honourable recycling chain with a separate producer. This sort of symbiosis is a key feature of future success, with cooperation being the cornerstone of long term sustainability across the whole network of industry. What they want now is the legislative side to do the same.

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