Jean Sentenac – Chairman & CEO, Axens – France
The CEO of Axens, an international provider of advanced technologies, catalysts, adsorbents and services, outlines his company’s response to the declining European refining sector and provides insight into the company’s prospects for further international development particularly towards Asia.
Axens’ main activities include technology licensing and engineering design. What is the company’s key driver of success?
Our philosophy is to help populations access a better quality of life by helping our customers delivering clean fuels and products from the chemical industry to the world. Providing these components in an efficient, safe and environmentally friendly manner is a necessity; diversifying the available feedstock, from oil to bio-resources, preserving their durability is a must.
At Axens, we have tackled this challenge by developing state-of-the-art technologies, services, catalysts and adsorbents with optimum performances. In many of the above fields, we have devoted patient efforts to bring them to world-class level. Our professionals are passionate with process engineering and material science; they also have the will to work with our customers and partners in a collaborative and seamless way. In a competitive and globalized world, the success in many aspects comes from this capability, as opposed to simply develop and sell.
Why are you committed to preserving these “modern production facilities” in France and what is their role?
France is our country of origin. We therefore aspire to maintain an activity here, while expanding in other countries. As a result of key historical decisions and acquisitions, we now have more sites in North America than in Europe. We are also developing one in the Middle-East, in Saudi Arabia precisely. Overall our company produces more than 200 different types of catalysts & adsorbents, for over 55,000 MTPA. “Modern production facility” implies the harmonization of safety, environmental protection, high quality standards, and efficiency across all units. I don’t believe it is any different in France than elsewhere: although we certainly have to accommodate higher manpower costs in Europe than in developing countries. We are adapting ourselves to that situation by constantly enhancing efficiency and productivity in order to remain competitive. In a technology and innovation driven business, many other factors have to be considered. For instance, our mother company IFPEN grants us access to world class R&D capabilities, and it can further be noted that in France today, policy and decision makers have a wish to support business, through various incentives.
On the consulting side, what exact services do you provide, and what are the repercussions on your main activities?
When we develop and market processes and catalysts, we gather a unique understanding on their optimal configuration, when integrating them within existing or new sites. We provide our clients with customized solutions that take into account crude slates, integration, CAPEX, energy and product qualities and value. For example, as a leader in clean fuels technology, we know better than anyone else how to optimize gasoline and diesel pool qualities. This is the first aspect of our consulting activity which revolves around feasibility studies for the definition and optimization of new refining and petrochemicals assets.
The second part of our consulting activities consists in bringing value to process operations through technical advice and software. While many companies attempt to provide a similar service, our competitive advantage resides in our in-depth process knowledge: a lot of underlying value lies in changing feedstock, adding value to orphan ones, or changing cut-points in the units. A generalist will fail to understand what will result from these changes and will only be capable of producing generic studies. In contrast, Axens digs deep into process modeling and linear programming, enabling customers to unlock in reality the full value of their assets.
Axens’ key markets of applicability include oil refining, petrochemicals and gases. Could you please share to our audience Axens’ position in each of these sectors?
Our position in refining covers virtually every area; from liquefied petroleum gas sweetening to vacuum residue conversion, and also includes commercially proven solutions for clean fuels production. We deliver complete basic engineering design packages to our customers, including HAZOP studies, detailed engineering reviews and more.
Axens is also a world-class provider in the petrochemical sector, with leading positions in the purification of monomers, intermediates and specialty olefins, and in the production and purification of cyclohexane, benzene, toluene and paraxylene.
In gas processing, we have a long-standing lead in the supply of performance catalysts for sulphur removal from natural gas and refineries through the Claus process. Natural gas processing needs to meet stringent specifications to produce liquefied natural gas (LNG). Axens offers a wide range of molecular sieves and mercury removal adsorbents with optimized formulation to cope with these requirements.
In these ever more stringent environments, how do you assess the growing importance of tailor made solutions via comprehensive engineering design packages and detailed engineering reviews?
Our three business units provide services that follow a process unit life-cycle from the feasibility study up to the production and continuing operation phase. Axens does not carry out detailed engineering, equipment procurement or construction (EPC) services; this business segment falls under the umbrella of engineering contractors selected by our customers. In addition to offering freedom to operate, Axens’ role is that of an architect who engineers the basic plans and performance guarantees.
Axens’ extensive operations know-how and technology background are continually upgraded in response to our customers’ demands for lower investment and operating costs, lower emissions, higher energy efficiency, higher yields and shorter downtimes. Engineering and design developments for new processes and improvements apply this outstanding expertise for both grassroots and revamping projects. Engineering developments are led in Rueil-Malmaison, France and Princeton, New Jersey, USA.
How has the company been performing recently in terms of turnover and growth? Could you contrast between organic and external growth?
Our company has continuously grown since its inception in 2001, at an average annual rate of around 10 percent. If our licensing activity remains linked to the rhythm of investment decisions in the downstream industry, our catalysts and adsorbents activity has been multiplied by 2.5 since the beginning. Our growth is mainly organic, thanks to the trust we earn from our customers, but also external. We recently completed two acquisitions: the activated alumina business from Rio Tinto Alcan in 2010 and the reforming catalysts business from Shell/Criterion in 2011. Both acquisitions have strengthened the company, in terms of customer recognition, products range, technologies and working environment. That is probably where the hidden value is: you always learn from others; never believe you are at best, always look to learn!
How is Axens responding to the decline of Europe’s refining sector, which has witnessed the closing of 15 refineries since 2008?
Europe’s refining industry is facing a slightly declining market, as well as competition from other regions. It must continuously adjust itself to new market dynamics. Less competitive assets are being closed or reconverted, while operators are focusing their investment on more competitive ones. We have developed specific processes, products and services tailored for the European industry, such as state-of the art biofuels solutions. Total has for example selected an Axens technology called Vegan to transform its La Mede site into a biodiesel hub. Axens has also recently commercialized Polyfuel, a process that allows for the conversion of lower value olefins from the gasoline to middle distillate that can be incorporated into the diesel pool, as well as energy efficiency consulting services.
What sparked your decision to introduce new activities in renewable energies and water?
IFPEN Group and Axens are actively preparing for a future in the alternative fuel sector by developing technologies to produce high quality medium distillates (jet fuel and diesel) from renewable lipids or synthetic gases generated from a variety of raw materials (natural gas, biomass and coal). In the field of biomass conversion, we are already commercializing an innovative technology (Atol) for the most profitable production of polymer grade bio-ethylene by dehydration of 1st and/or 2nd generation renewable ethanol. Axens is also involved in several projects including the production of 2nd generation bioethanol (Futurol), bio-based butadiene (BioButterfly), and biodiesel & biojet-fuel by thermochemical conversion of lignocellulosic biomass (BioTfueL). Finally, we have already commercialized a technology related to the production of clean fuels by direct coal liquefaction.
As a key player in activated alumina, we develop promoted forms which are the perfect choice for the adsorption of unwanted minerals and nutrients, with proven results for arsenic, fluoride, copper, zinc, lead, silica, phosphates and nitrates. It is currently used to treat potable water for municipal and household units as well as remediation of waste streams.
How would you describe the role of R&D and how do you invest to guarantee your status as a leading provider of advanced technologies? In that regard, how the long-term research, pilot testing and analytical-service cooperation agreement with IFPEN has encouraged the production of innovative solutions?
R&D and innovation are essential to the success of our activity. Our group is an R&D oriented company and we have the chance to have a shareholder, IFPEN which is an R&D and education institute, thus carrying a long-term view on this activity. We spend a significant portion of our revenue in R&D in comparison to the oil and gas industry in general. Our R&D efforts are justified considering it takes 10 years to develop a new process. Producing catalysts is also quite capital intensive and you have to invest EUR 1 to make EUR 1 sales on average, a ratio which is rather common in the chemical industry.
How is Axens activity distributed worldwide nowadays?
Axens now has 10 subsidiaries and participations, and 6 production sites to further expand its commercial and technical support services. We have capitalized on the shale revolution in the USA, where we are today involved in several initiatives in the petrochemicals sector. We can quote C4 olefins (Butene) production solutions as gas crackers no longer satisfy olefins needs. The Middle-East has embarked in a large series of significant investments, from refining to petrochemicals, and we are supporting our customers in that part of the world with our regional office. Since last month, we are also working on a modern catalysts production facility, located in Dammam, Kingdom of Saudi Arabia (KSA).
And what about Asia? Will this region concentrate the major part of future investments and future revenues?
Absolutely! That is true, due to its population and economic growth. Any company needs an Asian strategy. We are actually already present in Asia with technical and commercial teams in the largest countries and are actively looking to seize new opportunities.