2 January 2019

President's Year End Message

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Dear Valued HMC Stakeholders,
 
It is my pleasure to look back on 2018, a year in which we at HMC Polymers made significant progress on many fronts.  

Of particular importance is our progress in developing new products, as we strive to deliver Market Leading Innovation, a cornerstone of our business strategy.

Developing new products is never easy. If there is already a reference product in the market, customers typically seek a “drop-in” for the product they are already using. But a “drop-in” is often not possible, particularly if we manufacture using different technologies than the reference product.

Even if it is possible through comparable technology, it may mean we miss an opportunity to bring product improvements to our customers by selling a “me-too” product. On the other hand, delivering something new requires close collaboration between the customer and supplier.

I would like to take the opportunity to personally acknowledge and thank our many development partners for their collaboration – we know it is not always easy, but with commitment and patience, we advance together. I think the graphic shows the reality of such a collaborative effort. Project innovation rarely runs as predicted and the challenges are often greater and the timelines often longer than we initially expect. But the end result always makes the effort worthwhile.

Some of our innovation achievements in 2018 include:

  • Reaching a critical mass of sales for our high stiffness sewage/drainage pipe grades.
  • Achieving certification for our pipe grade, showing excellent pressure hot water performance and already fulfilling the PP-R-80 cold water classification - with the expectation of achieving PP-R-100 on completion of testing in 2019.
  • Commercial sales of our high purity dielectric film grade, first in the world using modern PP process technology.
  • Expansion of our family of Adsyl functional resin grades for film applications, targeting multiple different technologies.
  • Expansion of our offerings into the healthcare market where we will continue to pursue advanced product grades supported by the highest standards of manufacturing quality and reliability necessary to support such a highly regulated market.

Our journey to achieve World Class Operational Excellence continues. In respect of Occupational and Process Safety, we have passed the extraordinary and world-beating milestone of 9 million man-hours without any injuries. We also continue to make good progress on further differentiating ourselves through our focus on Quality and Reliability “In the Eyes of the Customer” and, despite already receiving good feedback on our performance, we have many ongoing initiatives in this area and we are confident we can and will improve further. We want HMC to become the benchmark in the region for quality and reliability for differentiated products.
 
Our industry is not without its challenges. The progressive increase in the oil price and tightening of global propylene supply has created a squeeze on profitability. Then the most recent volatility in oil price, combined with concerns about geopolitical tensions are resulting in some nervousness on demand, particularly in the 4th quarter. I also believe regulation and sensitivity regarding food safety in particular will continue to grow, and in this area HMC continues to be very well placed given our diligent focus on such matters. 

In addition, the industry in 2018 has become very sensitive to the need to address the sustainability issue, and the call for action is clearly there. This is another area where we at HMC have been working hard. Starting with encouraging industry to be more specific on the key issues regarding sustainability – every company is talking about solutions, but we are not always fully aligned on what are the most important and most urgent issues to address, by region.
 
Our opinion in HMC is that the most pressing issue in Asia is marine litter. The crisis of plastics in the ocean is bringing our industry into bad repute and over-shadows the issues of lack of circularity or greenhouse gas emissions that dominate the focus of Europe.

The industry in Asia is working on multiple solutions; for example mechanical recycling, feedstock recycling, bio-based solutions, mono-material solutions, new options at end-of-life, ocean clean-up etc. – all of which are contributing to build the circular usage of plastics. However, despite the effort, these initiatives cannot happen quickly enough to satisfy society’s demand for rapid and decisive improvement on the marine litter problem. That is a problem of collection and containment, which is in any case a pre-cursor to circular usage.
 
We also believe that banning single use plastics and the adoption of alternative material solutions risks that we add to the carbon footprint of 8bn people currently living on this planet. Marine litter can and must be fixed, and the commitment to create a more circular usage is extremely important - but the solutions adopted by industry and society must not risk accelerating an even greater potential ecological disaster – climate change.
 
Hence, HMC is working on multiple fronts under the sustainability umbrella, in particular:
  • Supporting local and regional initiatives to improve waste collection/containment and eliminate littering.
  • Seeking to educate local communities and consumers on the environmental benefits of plastics if used and disposed of responsibly.
  • Supporting industry to understand what is feasible in respect of building the circular economy of plastics and hence improve the usage sustainability of natural resources.
Action is needed, requiring alignment and unprecedented partnerships of industry, government, local regulators and representatives of the general public. That action is developing momentum, and it is my firm belief that this will quickly align to tackle the most pressing issues and help to reverse negative public perceptions.

Used and disposed of responsibly, plastics generally represent the best solution to societal needs with the lowest environmental impact. And that means the future of our industry continues to be bright, providing we can ensure that regulators and the public understand the total picture and the positive benefits that plastics provide as well as the best approach to address the issues we have.

On the subject of a bright future, I am particularly proud to note that in December 2018, HMC celebrated 35 years since the founding of the company and in January it has been 30 years since the start of production from our first PP line. We look forward to the next 30-35 years, building on our unique capabilities in the world of polypropylene and continuing to develop our staff to represent the most engaged, experienced and results oriented people in the industry.

So to finish, may I take the opportunity of again thanking you for your interest and support, to collaborate and to maximize the contribution of our industry to society.. And very sincerely, to offer to each and every one of you our very best wishes for health, happiness and success in 2019.





Martyn Tickner
President, HMC Polymers