In this episode of the AIBP ASEAN B2B Growth Podcast together with Dr Virat Chatdarong, PhD, Vice President, Specialty Chemical, TPI Polene Plc, we delve into the innovative approaches TPI Polene has adopted to not only thrive in the market but also contribute to a greener and more environmentally conscious future. Dr Virat addresses topics around the shifting landscape of the petrochemical industry, data-driven Improvements and Strategies, business sustainability at TPI Polene, and key considerations for digitalisation in the future.
In this episode of the AIBP ASEAN B2B Growth Podcast together with Dr Virat Chatdarong, PhD, Vice President, Specialty Chemical, TPI Polene Plc, we delve into the innovative approaches TPI Polene has adopted to not only thrive in the market but also contribute to a greener and more environmentally conscious future. Dr Virat addresses topics around the shifting landscape of the petrochemical industry, data-driven Improvements and Strategies, business sustainability at TPI Polene, and key considerations for digitalisation in the future.
The AIBP ASEAN B2B growth podcast is a series of fireside chats with business leaders in Southeast Asia focused on growth in the region. Topics discussed include business strategy, sales and marketing, enterprise technology and innovation.
Sue Yuin - AIBP:Hello, this is Sue Yuin from AIBP. Welcome to this episode of the AIBP ASEAN B2B growth podcast featuring Dr. Virat Chatdarong, PhD, Vice President, Specialty Chemical at TPI Polene. As you can tell from how we address Dr. Virat, he has a PhD from MIT, but beyond R&D, beyond technology, Dr. Virat is also in charge of sourcing and marketing in his role at TPI Polene, He's one of the key stakeholders in the company's transformation from commodity petrochemical products to specialty. Dr. Virat, thank you very much for joining us today. For those that may not be familiar with the industry itself, maybe I can have you to walk us through a little bit more about the business of TPI Polene, and also your background.
Dr. Virat - TPI Polene:Thank you. So good morning, everyone. My name is Dr. Virat Chatdarong, and I’m working for TPI Polene. So let me first introduce to Polene Group, we are a conglomerate, a multi industrial company, which is in Stock Exchange of Thailand. Our group originated from the petrochemical business back in 1978. We are the first LDPE and EBA producer in the regions. And from that point on, we integrated back into the refinery, and being the first integrated petrochemical complex in South East Asia. We expanded into the cement and construction business in the 1980s when the real estate business is really booming in this region. Also, we utilize our waste heat and start the power business. Right now, we also have the business in power and the global renewable energy, that chemical of get rid of 1000s of tons of participa waste per day and produce electricity under the TDI Pauline power, which is also listed in a strategic planner as well. So as I’ve been at TBI Pauline for 15 years, and have been assisting the president of specialty polymer business ever since, so I'm quite lucky to have him has my mentor and have the Overlook of this business myself, I suppose I was assigned the role of the r&d and product development. And then my role start to expand into the productions, also into the maintenance management, procurement. And lately, I've been also assigning the role of marketing and sales as well. So I would say that the overall business is under, under my supervision right now. So I can share you a little bit of the overall aspect of, of the transformations that I also participate myself and enjoy doing it. As my background, my background is a civil engineering, I graduated from PhD from MIT that in 2006. So despite being a civil engineer, taking a lot of courses in signal processing, and my thesis was about interpreting rainfall, satellite and radar images at the time, so two decades ago. So it's even more of stochastic or basically the statistics with a very compact time series behavior. And that way, I'm quite familiar with graph with interpreting the data and also how to manipulating the data as well. After after I graduated, I came back to Thailand and be a lecturer for two years before studying working with TPI. And I start to realize that a lot of things that I have learned from my class, a lot of teaching in the academic world is totally different when you try to apply that in in the real world, and especially for practice, on the production section. So that will be interesting to share with you.
Sue Yuin - AIBP:Thank you very much, Dr. Virat. I think for all the listeners of today's episode, they probably think that you're You sound very young, but somehow you just revealed your age earlier on when you mentioned your graduation date from MIT. I guess it is still considerably young; let the audience guess for themselves, yeah? Very interesting background, I think you mentioned what you did previously, and then how you transitioned to today's procurement, sales and marketing role as well, to take care of the whole specialty business, right? Can you give us a little bit of insight into, maybe what's the differences between the strategy, the innovation approach and digitalization journey in your first 10 years within a company, and then subsequently, what has changed?
Dr. Virat - TPI Polene:So, before I answer that question, let me provide the background of why we need to share and what's happening in the petrochemical world at the moment. Just to let you and the audience understand that this is my point of view, so that might be something that I'm not thinking along with other expert or something, as I'm not an expert myself. So please bear with me, on my opinion. Let's start with the petrochemical business. So there's a lot of products that come from oil that you may get familiar of. So, one type of plastic product is called polyolefin. Basically, it comes from oil and you may be familiar with like the bed or shoes or foaming food and drinking packaging. So, this is basically mostly come from the polyolefin part of the petrochemical. So in the past, the key successful petrochemical business is trying to reduce the costs, use all the products available, and they need to integrate upstream into the refinery. This way you have control of raw material, you can balance the product that you want, and it will be providing you with the economies of scale, and also in terms of finishing and the cost advantage. However, in the past decade, there are a lot of landscape shifts. The first one is in the US region, the petrochemical business, almost die 10-20 years ago, because of the really high cost of productions. But with the shale gas technologies, they come back and they come back really powerful in a very powerful way. So they have a very, very high cost advantage compared to the Arab region. The second interesting part is that in China, China is considered one of the biggest plastic consumer in the world. So if you look at the graph of consumptions per capita is increased, like 20%for the last 30 year, if consumed about 2/3, about 1/3, or about half of many of the plastic residuals. In China, it used to be that they don't have a lot of upstream capacity, they mostly import petrochemical products, and then they produce the goods that we export back to other countries, but in the past 10 years, they have started to changee the policy. So they start more and more with supply, they produce more supply, so there'll be more and more sustained. So whatever capacity that they import in the past will be affected by not lower demand, but maybe by the more supply from China itself, which is going to be more sustained. The third key factor is the Middle East part. To the Middle East, they use they have you know that they have a very good, a lot of raw material as well, they have crude oil, which is very cheap. In the past, they also sell crude oil mostly, but right now they start to want to make more profit. So they integrated to steam, they have a refinery themselves, and they start into the business. So any player that got caught between these three factora, the one that is not in the big market region, but in China, the one that doesn't have cheap raw material, going to have a lot of problem, the scale and integration may not help them in the future. For us the best case is even more sustainable, is even more problematic. So the key survivor for us is flexibilities product consistencies and also moving away to the high value added products. So that's the key three things. So back to your questions relating to the situation right now and our surviving tactic. How can technologies and information help? Basically, if you want to have a continuous stream of revenues and profitability and can be sustained we have to do the following recruitment. The first thing is we have to have a flexible production program. And it is because they need to respond into the market that change really literally right now. So we want to have real time data of the production, real time data of raw materials, our availabilities of which stops the data and so on. So, data analyzing data collection is the important key factor. The second one is we want to minimize the shutdown time. So whenever you shut down, you lost product and a lot of profitability. So to minimize the shutdown time, you need to have a good management of the equipment that you have the equipment and then and good schedule. This also involve a lot of data. And what we can build is really critical for the plant that is quite old, like last almost 40 years, and also the plant that has to change as well. So this is another key factor. The third one is we need to optimize the cost of business unit. So to be able to do this, we also need to have a data has and the data can be distributed into the related people so that they know what they're doing. They have some benchmarks, and they can help us improve. The first one is we need to have a superior and consistent product properties. So to have this require also a real time data, that fast monitoring and based upon the product quality, and also give a feedback when something went wrong.
Sue Yuin - AIBP:To follow up on what you mentioned on the data
portion:How difficult was it for you to be able to make sure that the data that you have is clean and governed? And is it something that's applicable for your next phase of transformation or innovation?
Dr. Virat - TPI Polene:Sure, that's a very good question. And it's exactly what we see the path. So like I told you earlier, data is the key. So we need to get, you need to have a collection of data that is correct. And also clean and in the format that can be that can make sense for analysis, right? In the past, business, like us, other businesses that have a production line is quite unique for each plant to have the procedure or to have the step workflow that they do. So it really it really rarely in the past for those or parent or families to have the center data system. So usually, we build a lot of small modules for each of the department. And that way it works in the past, it's worked quite well. The problem is that when we want to transfer the data from one format to the other format, from the same to the other system, merge them together, it is really difficult to do so if it's not in the standard format. Also, many of the report that we kept many of the data depicted in the past is also in the report form, the report form is not organized in a way that you can merge, subtract, or make a quality of that data easily. So that's another problem that we faced in the past. And lastly, we have a lot of new product coming up, we have a new workflow a new process coming up from the existing path. So how to debug the old program or make modifications and try to get this new process into the core system is really difficult because the language that they use in the past, the core program is quite difficult to make collections. So that's also another problem. So with this problem, we realize that what we need to do is first we need to lay the foundation, the infrastructure of the data again, at least for my section for the petrochemical business. So our first priority is to get a platform of data input that can link together and interconnected. And our approach is to have the committees of the data from different departments. And we ask them to go look for the tools that they think should best fit their need. So the production team might like one program, the mechanics team might like another and the R&D likes another program, so it will be really critical for like a really big one that fit it all. So our approach is okay, we let them choose what they want in a reasonable range. We screen them out and we select the technology that best suits under the requirement that they can have a standard format that talk to one another. So after that, we start to lay out the foundations and the workflow. And in parallel, we need to make sure that the data is correct, right, I mean junk in junk out. So to make the data correct for us, we have a report that people usually use the system anyway. So that report is for shaping of the data, whether it's correct or not. The second thing is, we have to come up with some cross check pattern contact parameters within the new system. Because one day, the old system has to be removed, and we wouldn't have any old system to compare to. So we have to come up with a new system that can shape itself. And the best and effective way for us is that we need to encourage the working people to provide feedback on what they are looking, what is the key metric that they want to see. So this takes time, but at the end, we invest in this foundation and is being quite successful. So we go past that step right now. The next step is, we're going to read, we were replacing our routine report with the data from the new system. So this one is quite easy, we know exactly what is the format, we just repaired with the new system. With this, we be able to get the report much easier for people to take to get in to get the report and to get the data. And it made more sense for the mid level management or the supervisor to check the report and then they can report back and they can make an improvement in the organization. So this three part is done for us. We are now mainly on the path of doing further analysis of the data. There are a lot of data at the moment. And many of the data, we have never looked at it before or even some data that we look at it every day, we never look at it in the added aspect. So just imagine you have the data of sale every day, the data of production every day. But sometimes you never compare dimensions like a time series and an overlap them together. So with the tools of the data visualization and data analyzing this makes it easier and much more practical to do it.
Sue Yuin - AIBP:That's actually very interesting, right? Because you mentioned about data integration, you mentioned about how you visualize the data properly and make a new conclusion out of the data that you originally would not have, like interpreted in the same way that you are going to on top of data. What kind of technologies are you exploring in moving forward?
Dr. Virat - TPI Polene:The participation of our people, the new idea that coming up from just the easier access to the data. And just because we provide some tools for them to easier will visualize the data that might be considered successful in some sense, but is still quite a difficult problem, which one is the best technology that we implement, and it provides the greatest return. So for this, I'm not certain that I can answer. But it's combined together. I cannot say that it is the data visualization, data analysis. It cannot happen without the data structure. Without making sure that data is correct. So there are a lot of things that combined together and provide a result right now. So in my opinion, everything that began in the past, or the foundation that we laid out. Until now, it's very important, but we are now focusing on data analysis and data visualizations. And to open the new aspect of of the productions of the efficiency, that will be something that interested to us to analyze the data. I think the AI and ML has become more and more important in this day. And they are a lot more advanced than even when we talk last year. So giving the example of ChatGPT that we mentioned earlier before the interview. Basically, right now, the activities you'll have some indications that mean people's intently blocked their capabilities, not to have informations after 2020 or 21, I cannot remember exactly. And if you also add some of the questions related to the data, you want them to forecast you want them to extrapolate the data, they will allow you to so they just they just don't give you an answer. But they have a potential to do that. And many of the visualizations software, the editing software right now. Whether it comes from like a big name like Microsoft or Tableau or whatever, they start to implement this kind of AI to help With the data and illustrations, imagine something like this, the drawback of human is that we cannot link many things together too much we can link like a few things, we can find the correlation. So it will get familiar with correlation between one variable with another valuable by doing a scatterplot, right, and you'll see a linear relationship, or more compact to have maybe like a curve or nonlinear relationship. Imagine you have one more parameter, one more parameter and one more parameter. So each will have like a 10 or 20, more parameters, human cannot make sense of how to mash them up together. We don't know Is it a real factor or not? For computer, I think more is possible for them, to have some data to process them. And maybe suggest that parameter a parameter b parameter c might be related, we should do some manipulation by this and it provides may provide some data, it may provide some recommendation for you. So that is one thing that I think is going to come to us really, really fast. And it will be amazing to see. But also it have a drawback as well, because sometimes it can pick up the correlations or something that they believe that is related, but it's totally something different is not related at all. So let's just talk about our specialty business alone, then for us, we start from the traditional company, let's start in the past, we have technology because by almost 40 years ago, we improved in the past three to four years, we will say that we improve from about four on par with other business right now we should be on par, at least I mean, on the order or infrastructure on the data's and on on the transformation, we should be on par with those big company that have a lot of money, and they invest a lot of things on this. So we doing little by data by ourselves, and then we shouldn't be on par with them. But on the potentials on the globe, I think we have a lot more potential because we have quite a nice size, we can communicate to the working people on site, we know what's going on, we have, we have only 600 people. So it's not too big. It's not too small. So we can communicate where we were with our people. And one important of the transformation also is the cooperations of your staff of your people, right, both on the top side and from the bottom side. So we have that advantage. So from the growth that we scale up from four to five, to say to seven at the moment, I think in the future, we might surpass them, we surely surpass them. But in terms of technology, our productions, I think we go beyond them because we are really specific. But the bigger companies like that, most of the top management, they might know something about the business. But they don't have time to dig into the detail of each one, they don't have the the really deep understanding of the quality of each plan because they are too big for us. My president is the one who built this himself, and he is still really active in making decisions on the data to be happy, we want to share this we want to more like family based business. So for us, the way to analyze the data and implement it actually implemented in a practical way that we shaped our process to be up more optimized, change our process so that we can expand to the next product level. Next product category is more open is more possible. So for us, this kind of analysis data is really crucial to support the decision that my boss and the top management are going to make. And since they know the foundations, they know the basic physics of what they're doing this kind of information in an easierfor both the speed that they, my boss and the top people want to take us away from the commodity business or commodity products into the specialty one.
Sue Yuin - AIBP:You also mentioned about the reason TPI Polene has to move from just pure commodity to have this specialty business itself. A lot of the topics around Petrochem business nowadays is about sustainability. How do you build a sustainable business itself? Could you share with us a little bit about like, TPI Polene views in terms of how are you creating sustainable business and also how you're addressing the environmental-friendly portion for the business and for the industry?
Dr. Virat - TPI Polene:Okay, in terms of sustainability of the business, what we try to do right now is we try to move from the red oceans, the commodities that even EBA is, in the past considered to be something a little bit special, because it's also above the LDPE and attr. PE plastic. So about, let's say that, if the raw material of ethylene is 100%, the polyethylene group is about half of them. LDPE group is from 50, it's about 20%, or 50, to about 10%. The EBA part is like a four or 3% of the whole whole big picture. So we are still we acquired in a niche market, but with this thick market still, is have a lot of shear in the past. So one way of thinking of it is that in terms of failure that they enter into this business, the capacity has doubled in the last five year, in three years, mainly, the player has doubled. So we can no longer stay at what clearly, we have. And we don't have advantage from that we started that I told you earlier, we don't have a cheap raw materials, we don't have the we are not near the market that can really manipulate the market or take positions. And also we are midsize, so we move away from application that easier, and a lot of players can produce like a foaming and coaling business into something like more difficult to produce two applications that we are focusing on right now. One is the plastic theme that goes in the solar panel is really popular product at the moment, because because of energy crisis, and everyone wants to have like a solar panels on top of the roof to reduce the political bill, if you go more and more specific, in the specialty region, the road get smaller, more narrow and more narrow and narrower. So that is what we have to do, we have to go to more risky path, the narrow road, but because of the more risky, less people is willing to do it, and we can do it, because we have understanding of the video, what we have, we have information that will support our fast decision. So that the idea so we see of the world in terms of clean energies, and be trying to be one of the producers in this in this business. This is from the petrochemicals from the first day polymer business part. On the other, the base of the second you might heard that cement is one of the most polluted business. Basically, to get one tonne of cement, you need to burn in the past, you need to burn about one time as well of coal. And coal produced a lot of greenhouse gas, carbon dioxide and everything else. So it's one of the key measures that our company also make an adjustment. So right now, instead of using the fullwell coal as a foil, we also using municipal waste. So we get with our principal waste. And at the same time, we have a technology that can use it as a source of energy instead of coal. So this also can can be converted into carbon credit, as well. And the third part is, of course, the renewable energies. So we have the main difference on this, the plastic that we have the municipal waste that we have, we can get some plastic out and then we can burn it in the cross environmental, and we can get the power from this and we get some add. So basically, our company right now is moving toward environmentally ESG. And also some we catch the trend of the sustainability as well. So that's the idea. Yeah, I think. Yeah, and today I think the information is the data in our pre of data analysis is very important as well. So that's the key thing.
Sue Yuin - AIBP:Yeah, transformation probably comes from a few ways for for TPI, right, not just the technology part is also the business part and you're trying to move ahead of the curve, so that the business itself is sustainable. I think my last question is just to end our last part, we can get your opinion on the benefits of adopting emerging technologies. And also I think you mentioned a little bit of drawbacks just now. If you could give your opinion about some of the risks and challenges that you foresee. For us to take note of, for any new integration, that will be something I think the audience will be keen to learn.
Dr. Virat - TPI Polene:So this is a really, I think it's a really good questions and also really beneficial for all the audience. In my opinions, what we tried to do, we centralize the data, we made the data easier to access, and we encourage people and collect our staff to get to the data and make sense of the data. On one hand, it provides very good feedback in terms of improvement in organizations adjustment optimizations. But on the other hand, it is really risky in cybersecurity. This is one of my biggest concern, because right now, our data is centralized in locations that if there is an attack on this data, first, it will be very difficult for I mean, suppose that the data has been hacked. So if there’s data breach, they contain quite a lot of sensitive information. Some know how some technical component of the production and in the data that we don't want to export to somebody else. So this is quite risky as well. The second thing is, if the data if the server or if the system is now when our staff get used to how to enter the data like this, this is the way let me give you an example. In the warehouse, 10 years ago, we use a manual tracking, we have like a checklist. After that of the of the product coming in and out of the warehouse, we changed it into the barcode system. So everything have a barcode on him, we use a hand handheld scanner to scan the product in and out and the control and make sure everything is right by the scanner. One day, the system is their system failure. And no one can use the handheld to scan the pallet. And we have been applied this this new concept at a time about three years or four years already. So everyone forget about how to deal with it. And we have to close our hair house for half a day trying to fix the issue, luckily, is not a very sensitive area in the warehouse. So we can delay a little bit more. But imagine if this happened to your main production company that is going to be very crowded and good money. So cyber securities is one key thing that we look into. And I think it's really have portability, potential risks. What we do right now is we have some software to help some firewall. And so political backdrop on this. But anyway, I just want to share with you that in my opinion, even if you don't know anything, you don't move anything, you don't adapt any transformations, you still expose to those kinds of risks anyway. I mean, you're exposed to two types of risks, the first type of weakness, do not follow up on a technology. So they may use a high technology to attack you anyway. The second thing is you cannot catch up on the train the new trend that coming up. So you lose the opportunity that you buy and big star in your business. So I think it's even worse if you are not adopting any technology at all. So there's no right and wrong answer. But for me, I think the best way to balance this out is you better update the trend and you better keep your eye and ear open more and more, meet new people meet some specialty, may some specialist in the field. And you will know yourself that when the time is right, you should adopt this. You should be aware of this from their from their experience.
Sue Yuin - AIBP:Thank you very much Dr. Virat. I think just to summarize, we talk about transformation innovation. At the end of the day data is at the central core of it right and you mentioned that to protect the data cybersecurity is also a key area of focus for any business pursuing innovation. Thank you so much for for your insights today. And I trust that the audience will truly benefit from what you've shared. We will leave Dr Virat’s profile and our posting and hope to connect with everyone after this call for any feedback or questions.
Dr. Virat - TPI Polene:Thank you. Thank you.
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