Having spoken to Arkema recently in Singapore, what does Arkema represent in the U.S. market and what is its importance to Arkema globally?
Arkema, while based in France, maintains a significant global presence, with the aim of evenly distributing its operations across all regions. As per the last annual report, the North American market contributes about 37% of our revenues, which is a slight increase due to growth in specific sectors in 2022 and 2023. The U.S. has emerged as a growth leader, but with upcoming projects, like the biorefinery plant in Singapore and others in Asia, we anticipate a rebalance. Additionally, the investments linked to the Inflation Reduction Act (IRA) align well with our focus on megatrends, making this a particularly exciting period for Arkema in the U.S.
What megatrends is Arkema focused on in the U.S.?
In the U.S., our focus largely revolves around green and renewable energy, advancements in semiconductor technology for AI and electric vehicles, and energy-efficient housing. About half of our U.S. business is in the construction sector, emphasizing products that enhance building insulation and energy efficiency. These efforts are significantly supported by legislation such as the Bipartisan Infrastructure Law and the IRA, reflecting a deep integration of our technologies with these emerging megatrends.
Regarding the global logistics of your operations, particularly the import of castor beans to your refineries, could you explain how this process works in North America?
The Pragati program, which has been operational for about eight years, epitomizes our commitment to sustainable farming and use of non-arable land, ensuring no competition with food sources. This initiative is central to our mission of integrating sustainable solutions globally. In North America, this involves the strategic sourcing of castor beans, their conversion into polymers, and their application in products that meet our bio-preferred standards.
Why does it take so long to bring bio-based products to market?
Introducing bio-based products involves multiple stages, from concept proofing to market integration, which can span several years. For example, in the case of electric vehicle batteries or new insulation materials for construction, the development cycle includes technological validation and alignment with upcoming product models or regulatory standards. This lengthy process is necessary to ensure that innovations not only meet current market demands but also align with future trends and legislative changes, thus securing a sustainable and profitable market entry for these advanced materials.
Could you discuss the significance of dimethyl disulfide (DMDS) and its role in Arkema's operations, especially in relation to biofuel production?
Dimethyl Disulfide (DMDS) is a crucial component in the production of biofuels, a market poised for significant growth in the coming years. Arkema is currently developing a new $140 million facility in Beaumont, Texas, specifically to enhance our capacity to produce DMDS. This expansion is aimed at supporting the growing biofuel sector in the U.S., showcasing our commitment to providing sustainable solutions that enable our customers to produce eco-friendly fuels efficiently.
What is Arkema's strategy for renewable energy implementation in the U.S.?
Arkema is aggressively pursuing renewable energy sources, particularly in the U.S., where our goal is to achieve 100% low carbon renewable energy by 2030.
This year alone, we have significantly expanded our renewable energy footprint, adding more sites to our network, bringing us to about 40% renewable. As our existing power agreements expire, we plan to transition those sites to low-carbon options as well, steadily closing the gap and fully integrating renewable energy across all our U.S. operations.
What do you see as the key blockers in advancing sustainable solutions in the chemical industry?
The biggest challenge in advancing sustainability in the chemical sector is overcoming market inertia. Customers are often reluctant to pay a premium for sustainable products, despite their professed interest in sustainability. This economic reality makes it challenging to achieve economies of scale for new, sustainable technologies. Additionally, the timing of investments in new plants and technologies is crucial but difficult to optimize due to the gradual adoption rates and the evolving regulatory landscape.
Could you elaborate on Arkema’s acquisition strategy in the U.S.?
Arkema’s acquisition strategy in the U.S. focuses on strengthening our market presence and rounding out our product portfolio, particularly in adhesives, where we were previously underrepresented in North America. Recent acquisitions, such as the performance adhesive group from Ashland, have not only balanced our portfolio but also created synergies with our coatings business, enhancing our market offerings. Additionally, acquisitions like that of a polyimide producer in South Korea have allowed us to introduce essential technologies to the U.S. market.
Looking towards 2027, what innovations do you hope Arkema will have successfully implemented in North America?
By 2027, I envision Arkema as a leader in technology and sustainability, particularly in areas like battery technology and recyclable materials. We are focused on bringing long-term projects to fruition, such as advancements in polyvinylidene fluoride (PVDF) for batteries and developments in recyclable packaging. Seeing these technologies in everyday applications—like 3D printed dental products and environmentally friendly packaging solutions—will exemplify our commitment to sustainability.
