IMAGE: Courtesy of DAMCO

In an increasingly “digital world” with rapidly changing technologies, one might assume that the 150-year-old chemicals industry must be outdated and in decline. Yet, studies[1] project that it will outpace global GDP growth till 2030 – with Asia accounting for about two-thirds.

Chemistry forms the basis of our everyday lives, from our food, medicine, fuel and cosmetics to the furniture you are currently sitting on. The broad gamut of the chemicals industry’s applications thus allow it to profit from a wide range of global trends.

Megatrends like a growing and ageing populations drive an increased demand for solutions for food, healthcare. In addition, the use of chemicals across industries is increasing (e.g. composites in the automotive industry); all will fuel the industry’s growth, predominantly taking place in Asia, Latin America, as well as Africa in the longer term. The chemicals sector accounted for more than 25% of Singapore’s manufacturing output in 2017[2], which itself represented about 20% of the country’s GDP.

That said, the landscape for the chemicals industry is expected to change dramatically for a variety of reasons. For example, new production capacities will emerge in growth regions or in proximity to raw material sources, with an increased focus on specialty chemicals, or performance chemicals, potentially affecting established producers in Europe and the US.

But there are other major trends. First, the continued will to increase sustainability and resource efficiency – a paradigm shift in consumer demands. Second, the notion of a “circular economy” is increasingly gaining attraction. And third, the digitalisation of industries. Together, they form the key ingredients for a revolution of the chemicals industry. The transformation has already begun. Welcome to “Chemistry 4.0”[3].

Going Green

Let’s consider the aspect of sustainability. In 2016, sustainable chemistry was recognised by the UN as an important approach to “the sound management of chemicals” and member states were encouraged to put it into action. Chemists will immediately think of the “Twelve Principles of Green Chemistry”[4]. But sustainability is about much more; it is a journey that requires all stakeholders, enterprises, users of chemical products, end consumers, the authorities as well as society to come together for a successful implementation.

To play a key role, the chemicals industry will need to reconsider its approach. This is reflected in the concept of a “circular economy”, which is more than just recycling. In a nutshell, a circular economy manages to continuously keep materials and products in use; and plans for this through the inception of new molecules or applications.

It will require a shift to renewable resources and increasing the efficiency of usage as well as closing loops throughout the life cycle. Some examples might be the increasing use of biorenewables or waste to produce chemicals or even CO₂ as a raw material. Digitalisation will help in providing data about use structure, material information, logistics and product design.

Going Digital

Let’s take a look at digitalisation. Certainly, chemical producers were among the first to use technologies like digital plant controllers and data analytics to improve efficiency of their operations, or computer-aided systems for plant design. In the meantime, other sectors (like banking and retail) have demonstrated innovative ways to use digital technology to evolve their businesses by improving the efficiencies of their operations and engaging end-consumers to generate greater value. As the process of data generation, collection and storage gets easier while computational capabilities increase steadily at low costs, data curation and exploitation will have a significant impact on many areas of the chemicals industry. It will redefine value chains, increase productivity, drive innovation and create new channels to markets.

For example, advanced data analytical tools can be applied to drive efficiencies through predictive maintenance or supply chain optimisation. Life Cycle Asset Management technologies are also increasingly being applied to optimise assets from conceptual design to potential decommissioning. These include “digital twins” (a digital copy of a plant), integrated platforms for data and document management, as well as integrated computer-aided engineering landscapes that allow smooth interactions between departments. This holistic approach will enable more efficient planning, keep plant data updated, reduce maintenance costs and help to ensure compliance with legal requirements as well as prepare the ground for future, more sophisticated applications like Augmented and Virtual Reality.

Research and development in the chemicals industry will also profit from applying advanced digital tools. These include high-throughput optimisation, advanced analytics and machine learning to simulate experiments, optimise formulations or simply access past data to avoid duplication and learn from experiments. For example, A*STAR’s Institute of High Performance Computing (IHPC) and Institute of Chemical and Engineering Sciences (ICES) combine simulation and classical process development methodologies to advance the design of new catalysts for industrial processes.

The digital transformation will force the chemicals industry to rethink established business models as well as familiar supply and value chains given that multiple customer industries are being disrupted by digital technologies. New channels to market need to be created, like complementing traditional sales interactions with a digital channel. Often, digital business models might need a specific network, a prominent example being precision agriculture: chemical and agricultural machinery companies use geological and meteorological data as well as in situ analyses to optimise seed, fertiliser and crop-protection deployment. Additive manufacturing may be another example where material suppliers join forces with hardware and software companies to develop tailored solutions for their customers.

Mass Customisation

Another development is the increasing customisation of applications, especially in fine and specialty chemicals. This may lead to more specific and “individualised” solutions (e.g. personalised medicine), or the development of actives for pharmaceutical or agrochemical applications with higher potency. The implications are reduced quantities, hence production capacities need to be adjusted. Life cycle and development times for these products will be under pressure as well. One logical consequence is that in the future, production plants will have to be much more adaptable to changing requirements. A solution could be highly automated and modular plant concepts that can flexibly adapt to different processes and allow faster investments (from years to months) through shortened planning times, reduced engineering as well as the reuse of equipment, all coming along with significantly reduced capital expenditure (CAPEX).

The overarching goal is to realise a shorter time-to-market while fulfilling smaller batch productions. While these concepts are being worked on widely in the industry, the standardisation of equipment as well as the development of adequate process control and automation concepts are major hurdles that still need to be overcome before full exploitation can be realised.

Innovating for Success

Besides an enterprise culture of agility, creativity, lateral thinking and openness to unusual ideas, another main factor for successful innovation is the establishment of an efficient and effective innovation ecosystem, which should span far across (chemical and pharmaceutical) industry boundaries. Singapore provides a fertile ground for open innovation as leading universities, the Agency for Science, Technology and Research (A*STAR) and multiple industrial sectors are in close proximity, and aim to work closely together.

And because companies embarking on the digital journey might become overwhelmed by the vast array of opportunities and need support to take the right steps, A*STAR initiated a Future of Manufacturing (FoM) Initiative in 2015. Working closely with the Economic Development Board and Enterprise Singapore, A*STAR aims to sustain Singapore’s competitiveness in manufacturing and technology innovation so that it is a location of choice for developing, test-bedding and deploying advanced cutting-edge technologies in the manufacturing sector.

The three key thrusts of A*STAR’s FoM Initiative are the complementary public-private partnership platforms of Tech Access, Tech Depot and A*STAR’s Model Factory Initiative, which aim to drive technology co-innovation, knowledge transfer and technology adoption by enterprises. A*STAR’s Model Factory Initiative bridges technological gaps in the private sector to help businesses across industries and across the value chain to reinvent themselves through technology adoption. The Model Factory is located at A*STAR’s Singapore Institute of Manufacturing Technology (SIMTech) and Advanced Remanufacturing and Technology Centre (ARTC). The Model Factory at SIMTech features a pilot-scale production line that enables companies to experience advanced manufacturing technologies first-hand in a learning environment and collaborate with stakeholders to test-bed and jointly develop innovative solutions. The Model Factory at ARTC will be launched in August 2018.

Consortia or public-private-partnerships that tackle fundamental and potentially game changing issues can be formed rather easily. For instance, in 2017, A*STAR launched the Pharma Innovation Programme Singapore (PIPS) in partnership with the National University of Singapore, with three pharmaceutical giants joining in the programme as pioneer members. Based on the problem statements of these pharma companies, PIPS aims to revolutionise the manufacturing of small molecules through developing digitised plants and advanced process analytical tools, moving from batch to more continuous operations and increasingly applying biocatalysis for efficient syntheses of complex structures.

Conclusion

The challenges outlined in this article will certainly change the picture of the chemical industry both in Singapore and globally, but at the same time they offer tremendous new opportunities for another successful 150 years.

The writer is the Executive Director of the Institute of Chemical and Engineering Sciences, Agency for Science, Technology and Research.

[1] VCI: “Chemie 2030”; Roland Berger: “Chemicals 2035”

[2] Economic Survey of Singapore 2017, Ministry of Trade and Industry

[3] After coal based Chemistry 1.0, petrochemicals based Chemistry 2.0, and the recent globalisation and specialisation with increasing use of biorenewables being Chemistry 3.0.

[4] P.T. Anastas, J.C.Warner, Green Chemistry, Theory and Practice, Oxford University Press, New York, 1998