Interview with Dr. Günter Hilken, CEO of Currenta
CT: What can the site operator Currenta do to make its chemical parks attractive for new tenants?
Hilken: We are pursuing a long-term program to ensure that the existing infrastructure at the three Chempark sites Leverkusen, Dormagen, and Krefeld-Uerdingen remains state-of-the-art. This ensures the long-term attractiveness of our sites for investors. Lanxess is currently building a new formalin plant and strengthening its aromatics network at Leverkusen. Bayer Material Science is investing €150m in the construction of a plant for TDI, a raw material for flexible foam, at Dormagen. Currenta thus provides strong arguments for new projects within the existing networked structure in the form of an excellent infrastructure and competitively priced services.
CT: What kind of industries do you particularly welcome and how do you see your position in relation to competition between locations?
Hilken: Our primary focus is on the chemical and related industries, which enjoy optimum conditions enabling them to concentrate on research and development and production at the three Chempark sites. Although we do not categorically exclude other sectors, the investor should fit in with our service portfolio and the other companies present. Otherwise, the specific synergies of a chemical park cannot be exploited. From one of the world‘s most extensive material and product networks, optimum R&D conditions, high educational standards, a stable energy supply, and constructive industrial relations, all the way through to highly efficient logistics, there are many good reasons favouring Germany and Chempark as a location for a chemical company. These include a high level of acceptance among the population.
CT: Recent information from the large German chemical companies implies that new investments will be limited to those sites which offer synergies through their networked structures.
Hilken: We face international competition in Europe. I believe that the chemical park business model offers a distinct location advantage here. As the originator of this concept, Germany, has the greatest experience and competence in exploiting synergies to the benefit of all the companies involved through ever-increasing networking. At Chempark, our aim is not only to supply our tenants with energy in the desired form but to sustainably generate added value by enabling synergies in the plant environment with other Chempark partners. Thus in the case of the above-mentioned TDI project the Finnish company Kemira will utilize the hydrochloric acid formed as by-product for the production of water-treatment chemicals.
CT: This summer, in connection with the ongoing investment at Chempark sites, you stated that „each euro invested by Currenta pulls in three euros in investments“. Is the cause and effect relationship really so straightforward?
Hilken: This is confirmed by statistics gathered in recent years: Given total investments of €4.2bn, our own contribution amounted to about €1bn. Sometimes, the activities of Chempark partners also trigger Currenta investments. However, it is crucially important that we deploy our project-related financial and human resources to the benefit of both the partner and the future viability of the entire site. Thus Currenta takes care of optimum integration into the Chempark network with a comparatively low investment in infrastructure.
CT: Just a few years ago most of the big chemical companies would have dearly loved to have sold the shares they held in the site operating companies of German chemical parks. A radically different perception seems to predominate today. How happy are Currenta‘s owners to spend money on infrastructure projects?
Hilken: Our shareholders are very strongly committed to Chempark. They have entrusted us with the task of managing and developing Chempark and attracting new investment. The owner companies ultimately also benefit directly from an efficient infrastructure and attractive services.
CT: Currenta plans to make annual investments of €250m in the next two years. Can you already name the projects involved?
Hilken: The TDI plant at Dormagen is certainly an outstanding project in which Currenta is concerned, among other things, with 48 energy and material supply connections as well as 14 different kinds of energy. The entire site benefits from the €40m invested here because the well developed supply and disposal infrastructure will be utilised even more efficiently. In the future we shall continue to invest in a competitive energy supply, dependable disposal, and a modern infrastructure with optimum logistics.
CT: More and more chemical companies have rediscovered their engineering and maintenance competence as a strategic field of activity. Currenta hived off its engineering activities into its subsidiary Tectrion – earlier plans to sell off this sector have apparently been abandoned. Has the outsourcing pendulum for technical services now swung right back?
Hilken: It is all a matter of perspective. Tectrion has developed very well in the past few years. Management has mastered a very difficult situation: New service packages were defined and offered to clients. The key to success was to offer complete service packages rather than to bill companies for work performed at hourly rates. One example is the management of assets such as pumps. This is a completely different, expanded business model: The service provider nowadays sells dependability, thus better reconciling the interests of his clients – i.e., that a pump should continue running – with his own. From the perspective of the client – i.e. the chemical plant operator – that is a significantly more valuable service. The „technical services“ sector is still far from easy territory. However, the chemical companies rely heavily on technical service providers – that is why I see a very positive outlook for Tectrion.
CT: How do you view the efforts of other chemical park operators to generate additional business outside of their own site?
Hilken: Our primary goal is to secure the success of our clients, to offer competitive services, and to find the right investors for the vacant sites in Chempark. However, our task is not just to fill vacancies but above all to maximise synergies for our partners and the location. That is why we intend to focus our attention on Chempark.[AS]