Gina Fyffe CEO
"Singapore continues to be a balanced and transparent place to be based. We feel comfortable that policies are fair, carefully thought through, balanced, and will continue to be so."
Can you provide an update on Integra Petrochemicals’ activities and developments over the past year?
2023 to date has been a year of consolidation and strategic review of the company, our product lines, and market coverage. This is a regular occurrence for Integra, but especially relevant this year as we are entering a new phase in global petrochemicals. It is also an ideal time as we have engaged in some generational organizational changes across our company.
While doing this we have had to be cautious not to take our eye off the ball and remain profitable, which so far has been successful this year. What trends in demand have you observed for petrochemical products in recent months?
Global petrochemical derivative demand continues to be weak on a global basis. There are some spots of encouragement, but the general trend is not positive. Companies are coming to terms with the reality that new plants built or recently completed, were built based on a pre-pandemic market outlook. Now they are feeding into an already oversupplied market. Based on recent analysis and revised global GDP growth, it will be several years before some products rebalance. How have recent geopolitical events and trends, including China’s reopening and high inflation, impacted Integra Petrochemicals and the trading industry at large?
Let us just say that it is not making life easier or business any less complicated. The 2022 story, high energy prices, and a split market for sanctioned energy products, which the market scrambled to understand, is now more or less factored in but still requires extra due diligence on the provenance of cargoes.
The reopening of China and other countries saw companies disappointed. There was a high expectation that supply/demand would return quickly to pre-pandemic levels. While we were not quite that optimistic, we had expected an uptick in demand and a steady ramping up, which has not been in evidence so far. This is much more of a complex global story than just China and their current economy, and one that with the high inflationary pressures continuing to plague economies, is likely to lead to rebalancing and harder times yet to come as we move from a temporary oversupply to a mid-term need to rebalance. GDP growth is needed to rebuild petrochemical growth, and that is, on current numbers, going to be a slow process. What are the primary challenges facing the Singaporean chemical industry?
Singapore’s industry has developed well thanks to its openness, skilled workforce, and understanding of integrated product management across the board. It has most recently pushed further downstream, as it continues to diversify the product and company mix in Singapore with an emphasis on more specialty and mid-sized production companies.
This is a great strength based on long-term vision, the county’s location on trade routes, and as a financial hub with business-friendly policies. Some of this can suddenly become a weakness if links in that chain fall out. It is well known that the salaries of skilled employees and the shortage in the supply of qualified staff are causing companies to struggle to adapt and restrict growth in the short to medium term. This is at the same time as new global taxation and carbon policies come into force. What are the strengths of operating in Singapore in the current economic landscape?
There is a raft of changes in global company-level taxation, with minimums being set, carbon-related taxes, and general de-globalization issues which in many respects are far from clear. Singapore continues to be a balanced and transparent place to be based. We feel comfortable that policies are fair, carefully thought through, balanced, and will continue to be so. That makes it a lot easier to plan the company’s future developments on staffing, products, and general development. Can you describe Integra Petrochemicals’ strategy and goals for the next year?
We expect to move into 2024 with more of the same attitude and way of doing business but with an additional focus on decarbonization effects and biofuels. With global uncertainty still high, we want to step carefully into 2024 ensuring that we continue to have a solid base but adjusting out and around that base. Innovation and change with care and caution is the best way to sum it up.