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Interview

Gina C. Fyffe, Executive Director, Integra Petrochemicals, Singapore

02.07.2014 / Energyboardroom

Gina Fyffe, Executive Director, discusses why Integra is more than just a trader that offers flexible, professional and discreet services to clients around the globe as well as adding value from a unique understanding of the products traded. In Singapore specifically Intregra has positioned itself to help fill the logistics gap in the virtuous petrochemical triangle that is being formed with Malaysia and Indonesia.

Could you please introduce the company to our international readers and describe its evolution since you founded it 25 years ago?

Integra was founded in September 1989 in Europe as a small European petrochemical gas trader that rapidly expanded into the US and Asia. Our office in Beijing opened 22 years ago, while our presence in South Korea totals over two decades. The provision of transportation and logistical services to our clients and the opportunity to fill a market gap in the petrochemicals sector were the key incentives for our expansion.

In my previous position at Exxon Chemical, I understood that C4s were going to move in larger volumes and head also towards the Pacific> I had been involved in the logistics of the first cargoes of propylene between Europe, the US and Asia. In principle, big companies could easily cover this market but did they want to develop the manpower to do so? Thanks to my background in shipping and petchem gases, it made sense to me to service this segment as a trader and logistics provider. As such, Integra was created to provide as much outsourcing services as trading services. Being a service company, we are filling the 0.01% gap left by petrochemical companies when they face a supply shortage and need to look towards the international markets. The other 99.9% of the chemical majors’ business is internal and related to servicing their local business, their customers and their downstream.

Since we have never believed that traders make markets, we believe that the best manner of operation is be as invisible as possible. Our clients don’t want everybody else to know that they have a supply problem at one of their plants, and Integra responds with discrete, quality service.

Can you tell us a bit more about the scope of products and services that you offer?

Starting as an Olefins company, we began trading on a global scale very quickly. Within four months, we expanded outside of Europe, went transatlantic and completed our first deep sea cargo. With time, clients began requesting other product types. As a result, Integra first started trading Chlor Alkali and a number of Aromatics before beginning to work with propylene and ethylene derivatives and gradually moving down the chain into related markets.

In addition to increasing our product offering, we expanded our global footprint. Integra, for instance, signing the first C4 contract in Korea and imported the first ethylene cargo into that country. Furthermore, we took 100% of the crude c4 from one of the cracker operator’s cargoes in Korea for their new cracker and transported it to the US and later also transported their butadiene in the region and in the US. To give another example, when Reliance in India started up their polyethylene and polypropylene processes, Integra supplied the first cargoes of propylene and ethylene and loaded their seagoing barges built in Europe with product bound for India. As a proactive player we enjoy being the first in identifying emerging opportunities, Integra faces the challenge of maintaining that market share once everyone starts jumping on the bandwagon.

How do you maintain your competitiveness?

As I mentioned we like to be very proactive and are good at identifying emerging trends. With our presence in China and Korea well established over the past two decades, we also recognized the bourgeoning development of the petrochemicals industry Southeast Asia in the last 12 years. Initially, we catered to the region from Europe, but, as the market evolved, we acknowledged the need to establish a local presence in Southeast Asia and so relocated our head office to Singapore.

At its core, our teams of experienced and professional people truly define our success. Most of our staff have years of experience with the oil & gas and petrochemical majors in, North and South East Asia, Middle East, Europe and the US. We will not settle for anything less because making a mistake in petrochemical supply and shipping results in serious consequences such as plant shutdowns and environmental risks, as well as bringing a great deal of reputational risk for the companies concerned.

Because our teams have many years of experience in the industry, we understand the consequences of even the slightest errors. This deep understanding of the products and how our customers use them is where Integra truly adds value. Overall, our clients and suppliers are an integral part of an delicate supply chain with facilities and factories on either side of the wider value chain whose production processes are reliant on their efficient operation, and, as such, we are obligated to receive and deliver products on time and correctly.

What does Singapore mean for the Integra group of companies?

Singapore emerged as the ideal location for our headquarters for a variety of reasons. Firstly, Singapore is a melting pot of different cultures and most, if not everyone, in Singapore speaks a good level of English. For an organization with more than 22 nationalities, the ability to communicate and share a degree of cultural intelligence is so essential that it forms part of our DNA. Singapore also boasts a rich pool of talent and is an attractive place for professionals from across the world. Moreover, Singapore is corruption free, has strong rule of law and the legal system shares many similarities with English law. The ability to operate in a transparent and familiar environment has proven highly valuable.

With investments in downstream facilities branching out into the proximate regions of Malaysia and Indonesia, will Singapore’s positioning as a major regional hub be eroded in your view?

These investments promise to create a virtual triangle between Malaysia, Indonesia and Singapore, especially now that the Indonesian project has identified a site for its petrochemicals complex in Sumatra. Integra views these developments as a triangle of petrochemical capacity that benefits all involved parties. Although national interests are clearly at play, not everyone will produce the same products. Furthermore, companies from a country on one leg of the triangle stand a very good chance of being able to upgrade value by exporting to a neighboring country, who will then be able to turn that midgrade product into something better, which can finally move on to the final leg of the triangle to be exported. Such triangle dynamics are truly fascinating, and they ensure that by 2020, Malaysia, Singapore, and Indonesia will add value to each other’s economies. Together with their growing populations, this will only serve to further stimulate trade in Southeast Asia. Like in the Middle East, however, the primary bottlenecks is the lack of logistics capacity to support the increase in trade. Integra can help to fill this logistics gap that has developed within the virtuous triangle.

What opportunities are you most excited about in the Middle East?

Integra responded to growing demand and exciting changes in the Middle East by establishing a regional office in Riyadh, Saudi Arabia. In response to population growth, risk of unemployment and need for jobs, Middle Eastern countries are stimulating the push to retain a greater share of value creation within their borders and to develop into new products. For example, the Royal Commission in Saudi Arabia is proposing a large rack of potential projects, all of which will not develop immediately but there is much potential. For example, the Saudi government wants to encourage the construction of cars locally, which means that all sorts of specialized chemical and petrochemical based components will be needed there to support the growing automotive sector.

In addition, there is going to be an abundance of liquid chemicals coming out of the Middle East thanks to all of the new refinery developments. Although many businesses have started developing means to transport these chemicals, it takes time to build a specialized logistics team and infrastructure, and this is where we see our skill set being called upon. We aim to support our partners global marketing efforts on the strengths of our global reach and capacity to trade, transport and ship their products quietly and skillfully.

Integra pioneered being more than just a trader. Can you tell us what the next steps are for the company?

Being more than just a trader started very early on because we saw ourselves as a solutions provider. If 99.99% of a petrochemical company’s business is running their plant, the remaining 0.01% of operations becomes cumbersome. Speed is of the essence. If a cracker goes down and derivatives are running, a company needs to find feedstock very quickly but would not want this request to be known publically, as the impact on reputation, customer relationships and share price could be significant.

In such cases, petrochemical companies need a partner like Integra that can be relied upon to secure that marginal supply and which will ensure the seamless flow of operations. Our global teams and networks are specifically geared towards such processes. Every one of our traders trade in their own region, but they are also talking to each other all the time and always know about the entire group’s operations from their global counterparts. That is part of being more than just a trader – it is about being a provider of informational support to your customers when they need it. It is also about being able to transport your product and ensure it arrives according to specifications, at the right time and at the right price.

What are your investment plans for the company and other personal ambitions to grow the business?

Starting from zero, we have grown into a mid-sized company in 25 years. Growth for the sake of getting bigger is not our ambition. Instead, we would like to indent further and expand our distribution reach. Furthermore, we are likely to get more into the terminal and breaking bulk business since we are interested in reaching the smaller customers, particularly because of their issues with credit. Small companies can become big companies, and we would like to grow alongside them.

We have also ventured into ship owning and have a fleet of 14 chemical tankers trading in Asia. We see this as not only a natural fit, but an additional leg for the company looking forward.

We are also looking at how to join with companies in the Middle East who have fantastic opportunities for production but lack sales and marketing capabilities. Further afield, the Jones Act in the US offers an interesting opportunity from a shipping point of view for our US colleagues.

Given the dynamic and fast paced nature of the industry, we aim to stay nimble and light on our feet, continuing to listening to our customers as their needs continue to evolve. Flexibility is about your mindset and attitude, and, as such, we need to keep renewing ourselves. Integra is sometimes likened to the singer Madonna, since we adapt and change to the market shifts. This is something we smile about but are proud of and hope to continue that reputation going forward for a long time.

To read more articles and interviews on Singapore, and to download the latest free report on the country, click here.

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