The stage is now set for a major offensive: After years of positioning attempts and efforts to resolve the vexing question of which services beyond the provision of an infrastructure should belong to the core business of a chemical park operator, site services providers have meanwhile become increasingly confident: The sector has come to recognise that there is no single ideal solution for the portfolio of offerings of a site operator. What may make good sense at Höchst Industrial Park near Frankfurt may not necessarily be appropriate at Marl Chemical Park in the Ruhr District. „The universal chemical park services provider has proved to be utopian concept“, according to Dr. Lothar Meier, Head of Marketing and Sales at Infraserv Knapsack: „Chemical park services providers have to evolve in a highly individual manner from the structures that are already in place.“ The company operates a chemical park which has recently undergone an energy-oriented structural transformation in the vicinity of Cologne and now intends to expand outside the chemical park; to this end it has adopted a new strategy and restructured its portfolio of offerings.
Similar developments are to be seen in other industrial parks with a chemical focus. Evonik subsidiary Infracor reports that it already generates over 60 per cent of its revenues outside Evonik. „Admittedly still primarily at the Marl site, but external business is increasing at annual rates exceeding ten per cent“, explains Bernd Vendt, Head of the Technology Division at Infracor.
Both Infracor and Infraserv Knapsack are relying upon an integrated approach embracing on-site infrastructural services as well as technical services such as maintenance products. In contrast, Infraserv Höchst and Bayer‘s site services provider Currenta have chosen to adopt a different approach. They have divested themselves of their technical services operations and now concentrate on site development.
Nevertheless, these providers also want to develop business outside the confines of their own sites and to grow. Typical areas of activity are consultancy services for industrial park operators – e.g. in other countries – or acquisition or operation of other sites. Thus Infraserv Höchst has also been managing Clarient‘s Griesheim Industrial Park (Frankfurt) since September 2009.
Structural transformation intensifies concentration on core business
Structural transformation has accelerated significantly in the wake of the financial and economic crisis and is imparting fresh „spin“ to the long-term trend. Even prior to 2008 there was a clearly recognisable trend for chemical companies to outsource non-core business activities. The financial and economic crisis has partly raised companies‘ attention to the question of how to introduced flexibility into what have hitherto been fixed costs. „In my view, concentration on the actual processes will be a megatrend in years to come“, declares Dr. Roland Mohr, Managing Director at Infraserv Höchst. Because, according to Mohr: „A clear distinction between primary and secondary processes offers enormous cost optimisation potential. The overriding importance of efficient processes and flexible cost structures became patently obvious in the economic crisis.“
The chemicals division of the Evonik Industries Group, which includes specialty chemicals manufacturer Degussa, is anticipating changes and growth in the market for site services. In order to participate in these developments, the group set up the Site Services Business Unit within the chemicals division on 1 October 2010. With immediate effect, all site services – such as those provided by Infracor and IPW – were to be included in this business unit. Inter-site cooperation and new service offerings were launched the aim of attracting new clients. The Site Services Unit already claims to generate 40 % of its revenues with its 7,000 employees from sales to clients outside the Evonik Group.
Business with external companies safeguards the future
That the recent outward-looking orientation means more to the former engineering departments of chemical companies than additional revenues clearly follows from the comments of Dr. Lothar Meier, Knapsack: „Spectacular new arrivals of companies such as Ticona or NKT Cables are nowadays simply a stroke of luck. It is our goal to expand our economic base and thus also to secure our future, because our on-site clients need an economically stable partner.“ The service provider is initially attempting to drum up new business within a 50-km radius of the Knapsack site near Cologne. „But we are also keeping additional options open in other target regions and locations“, Meier points out. The company‘s new strategy will therefore include an expanded product portfolio encompassing both plant services and plant planning and construction, but also as well as site operation and infrastructural services for suitable sites.
Targeting medium-sized chemical enterprises
Just where the growth in the market for maintenance services is expected to come from remains an open question. Experts see part of the answer in the numerous medium-sized chemical companies which have not relocated to industrial parks but manufacture on their own works sites and also have a need for chemistry-specific services. In Germany alone more than half of the country‘s 2,000 chemical companies are located outside chemical and industrial parks. To these can be added other sectors of the process industries – including power generation, the glass industry, or mineral oil processing, in which processors are increasingly asking whether maintenance, media supplies, etc. still belong to their core business or whether fixed costs might not be rendered somewhat more flexible.
Competition with classical industrial service providers
However, the intense outward-looking orientation of chemical sites and their specialised service providers is in direct competition with the expansion plans of classical industrial service providers not tied to their own sites. Companies like Bilfinger Berger Industrie Services, Voith Industrial Services, or Thyssen Krupp Xervon are busy soliciting business in chemical parks, and also have medium-sized chemical companies in their sights as an attractive target group. „Any fixation on large-scale companies makes a company much more vulnerable in crisis situations“, is how Stefan Elsner, Managing Director of the Energy-Petro-Chemicals Division at Voith Industrial Services, justifies these activities. „The outsourcing trend was further enhanced by the economic crisis. We note increased interest in outsourcing maintenance tasks on the part of medium-sized chemical enterprises“, reports Franz Braun, Managing Director of Bilfinger Berger Industrial Services (BIS) Maintenance Südwest.
Berger sees himself as running a kind of medium-sized enterprise: „We operate on a regional basis and – although we are conscious of being part of group – have almost no administrative overhead in our organisation; that it precisely what medium-sized enterprises among our clients value“. The company has resolved the apparent contradiction between a position as Germany‘s largest industrial service provider, on the one hand, and a medium-sized enterprise mindset, on the other, by setting up a regional cooperation management system: The regional divisions use the skills of specialists based in the individual branch offices across the different locations, while at the same time pooling their procurement and materials management to obtain favourable conditions.
Service companies acquire additional chemical industry expertise
Through this approach of deploying maintenance specialists across different locations, the service providers also unleash synergetic potential when they take on the former maintenance units of new clients. As a desired side effect, the service companies also acquire additional chemical industry expertise.
In order the increase their chances of success with this target group, Voith Industrial Services has recently restructured its industrial services portfolio: The maintenance service provider‘s new Energy-Petro-Chemicals Division is to offer specific solutions for the process industries. Sector-specific expertise is undoubtedly a good door opener: „We have decided to make the automotive and energy & petro chemicals sectors the main thrust of our sector-specific services because we believe that these will be the areas in which we can generate future growth. Both are highly specialised industries in which great responsibility rests on services“, explains Stefan Elsner. He sees one of the strengths of supraregional industrial service providers in dealing with small and medium-sized chemical enterprises to lie in their pools of specialists: „Clients have access to a large pool of specialists even in the case of minor downtimes.“
Conclusion: The trend to outsource maintenance and site services still continues after the financial and economic crisis. Here the chemical park operating companies see both growth opportunities and possibilities of increasing their economic stability in the interests of their on-site clients. Target groups for external growth include medium-sized chemical enterprises which are located on their own self-sufficient sites rather than in industrial parks. However, classical industrial maintenance companies also see additional business opportunities here, which is why competition is set to intensify in the future.
Onsite Operating Company Models
Onsite operating company models differ in particular in the extent of the net added value and the spectrum of the services on offer to the producing companies located within the industrial park. At one end of the scale are onsite operating companies who concentrate on the commercial marketing of the site, i.e. the administration of the assets and the facilitation of service provision contracts. (Example: P-D-Chemiepark in Bitterfeld). The other end of the scale is occupied by providers offering integrated services, who, in addition, deliver basic infrastructure services, services such as those linked to the location, for instance logistic, energy provision and IT, as well as one-stop provision of services not directly associated with the location, such as technical maintenance, analytics, staff restaurant provision and so on. Such examples include the chemical parks in Marl (Infracor), Knapsack (Infraserv Knapsack) and the location at Marburg Behringwerke (Pharmaserv).
Whilst the operation of the basic infrastructure of an industrial park, combined with that of the running of premises, provision of supply, the disposal infrastructure and the like are capital intensive, services not linked to the specific location, for example technical mainte-nance, analytics and so on, as a rule do not require large capital investments. Yet they require high staffing levels – interchangeable to a high degree – and are subject to fierce competition. Over the last few years, these diverse business sectors have therefore been divided organisationally at a number of sites: Currenta has created the separate company Tectrion as a spin-off for these technical services. Today, Currenta is responsible for the operation of the chemical park as well as for its infrastructure. A few years prior to that, the technology business of Infraserv Höchst was sold to the industrial service provider Reinhold&Mahla, now part of the organisation known as the facility management provider Bilfinger+Berger Industrial Services. A similar pattern emerged in Gersthofen: Following the creation of the spin-off company TSG to provide technical services, that company has since been taken over by the facilities manager MCE in May 2008. MCE now also belongs to Bilfinger Berger Industrial Services.
It depends very much on the particular structure to establish which model holds the maximum benefit for a given user within an industrial park. The desirability for an onsite operating company capable of relieving the production company of as much complexity as possible is all the stronger the more users a location attracts and the smaller those companies are.
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Process GmbH & Co. KG Process GmbH & Co. KG
Im Weiher 10
Evonik Industrie AG
Paul-Baumann-Str.1, Chemiepark Marl
YNCORIS GmbH & Co. KG
Bilfinger Industrial Services GmbH